HomeMediaLatest NewsHow Gazprom can solve the problem with Nord Stream

How Gazprom can solve the problem with Nord Stream

15 June 2022

Gromov Alexey I. Principal Director on Energy Studies, Head of the Energy Department

Alexey Gromov, Principal Director on Energy Studies of the Institute for Energy and Finance, commented to the InfoTEK Internet portal on the reasons for reducing Russian gas supplies via the Nord Stream 1 gas pipeline and possible ways out of this situation.

The volumes of pumping through the Nord Stream are declining. In accordance with the requirements of technical safety, Gazprom is forced to limit the operation of those compressor stations for which there is no backup circuit (that is, spare GPUs that can duplicate those sent for repair). If one of the units is not promptly repaired, or is not returned from repair, there is a strategic challenge to the safety of the equipment. According to technical safety requirements, this situation can lead to the closure of not only individual compressor stations, but also the suspension of the operation of the entire gas pipeline. And this is a big political and economic challenge.

So, theoretically, Nord Stream can be stopped - strictly on the basis of technical safety requirements. But blocking the Nord Stream is not in the interests of either Russia or Germany. This is force majeure for both parties, however, if Gazprom does not promptly eliminate the problem with Siemens, the reduction in deliveries due to technical reasons related to equipment malfunction may lead to claims from Germany in connection with the failure to fulfill the contract - if Gazprom cannot transfer volumes from Nord Stream to other routes. And here, in fact, there is only one option left - Ukraine, since it is impossible to supply gas through the Yamal-Europe pipeline due to Russia's own counter-sanctions.

But we need to think about the fact that the problem is much broader, it is of a systemic, strategic nature. If the situation is not resolved, it will become a threat to the entire Russian gas transmission system as a whole, since in recent years Siemens has supplied a lot of equipment for the Russian GTS, and compressor stations require annual preventive maintenance, reparation and replacement of some elements. It is necessary to assess where Siemens equipment is used in the Russian GTS and eliminate this threat through import substitution. The gas transmission system in the Russian Federation has been operating for a long time, and there are compressor stations of domestic production, this is not exclusive to Siemens, we have experience in creating analogues.

However, the use of Siemens equipment in Nord Stream is obviously specified in the contract. Nord Stream is an international project, and it includes German capital. So, attempts to replace German-made equipment with Russian ones may give rise to new questions. But they will be decided at the corporate level.

Gromov Alexey I. Principal Director on Energy Studies, Head of the Energy Department
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