Authorities inare trying to establish what caused a sudden drop in pressure in the defunct Nord Stream 2 gas pipeline, with a spokesperson for its operator saying it could have been a leak.
The pipeline has been one of the flashpoints in an escalating energy war betweenand Moscow since Russia’s invasion of Ukraine in February that has pummelled western economies and sent gas prices soaring.
Nord Stream 2’s operator said pressure in the undersea pipeline dropped from 105 to 7 bar overnight.
The Russian-owned pipeline, which was intended to double the volume of gas flowing from Vyborg, Russia, under the Baltic Sea to Germany, had just been completed and filled with 300m cubic metres of gas when the German chancellor, Olaf Scholz,shortly before Russia invaded Ukraine.
European countries have resisted Russian calls to allow Nord Stream 2 to operate and accused Moscow of using energy as a weapon.denies doing so and blames the west for gas shortages.
“We are currently in contact with the authorities concerned in order to clarify the situation. We still have no clarity about the causes and the exact facts,” said a statement from the German economy ministry.
The pipeline’s Swiss-based operator, which has legally been wound up, said it had informed all relevant authorities and that the leak, if that were the cause, could not have been at the landing point in Lubmin, northern Germany. “If it were in Lubmin, you’d have heard it,” the spokesperson said.
Gazprom referred questions about the incident to the Nord Stream 2 operator.
Germany has informed the Danish authorities about the incident and is trying to establish whether the drop in pressure occurred in German waters. Danish authorities have asked ships to steer clear of a five nautical mile radius off the island of Bornholm.
Russia has cut off gas supplies to several countries and, accusing western sanctions of hindering operations.
The suspected leak did not have an immediate impact on gas trading amid signs that Vladimir Putin’s efforts to disrupt energy supplies in Europe this winter will be thwarted.
The price for British wholesale gas for delivery this weekend dropped nearly 24% to 160p a therm on Monday, with the price for delivery on Tuesday down 17% at 190p a therm.
Prices have tumbled in recent weeks as Europe has made progress in filling up storage facilities for this winter and intervened in the energy market to protect consumers.
The day-ahead price has fallen sharply since the 589p a therm seen a month ago after Russia’s Gazprom began to.
Asked about the potential leak in Nord Stream 2, Tom Marzec-Manser, the head of gas analytics at Independent Commodity Intelligence Services, said: “In terms of European supply, no one in the market seriously thinks it could become operational and a route to market for Russian gas, so it should have no impact on the price. It’s not a lost supply route – it’s a lost white elephant.”
Analysts said the fall back in prices was due to a collection of factors including progress in filling up storage facilities. Prices have also fallen due to an increase in wind power generation and signs that routine annual maintenance on Norwegian gasfields has gone to plan without need for further outages.
Marzec-Maser said: “The fact that wind generation has kicked in and there’s plenty of wind power across the continent has eased the pressure on the amount of gas-fired generation required, particularly given the issues with hydro and nuclear.”
Low water levels in southern Norway haveof hydroelectric power, while French nuclear power stations have faced problems, including the .
Marzec-Maser said concerns remained over how Europe would be supplied next year when storage facilities are likely to be empty and Russian gas is potentially unavailable, unlike earlier this year when efforts to import more gas began.
The fall in wholesale gas prices should reduce the cost to the UK government of its cap on energy bills. The government has, a policy that could cost more than £100bn.