German gas supply currently still secure - ministry

Current crisis-induced LNG prices are double that. Aurora said an immediate import stop would see gas prices spike to 200-260 euros/MWh in 2022.


Reuters | Updated: 11-05-2022 14:54 IST | Created: 11-05-2022 14:47 IST
German gas supply currently still secure - ministry
Representative image Image Credit: ANI

Germany's gas supply is currently still secure, the economy ministry said, after flows of Russian gas to Europe through a key transit point in Ukraine dried up.

Kyiv said on Tuesday it would suspend gas flows through the Sokhranivka transit point which it said delivered almost a third of the fuel piped from Russia to Europe via Ukraine and move the flows elsewhere. "We are monitoring the situation closely. The gas crisis team and the pipeline network operators are also monitoring the situation," the German economy ministry said. "Supply in Germany is currently still secure," it added.

Ukraine blamed Moscow for the move, saying the route was controlled by Russian troops. Russian gas producer Gazprom, however, said it saw no reason for the stoppage and it was not immediately clear how the dispute could be resolved or how long the suspension might last. Germany's gas industry association said it could only assess the impact of the shutdown of the transit point once it had seen how the move affected flows.

The Ukrainian Sudzha point was working and so flowed into Europe via Poland on the Yamal pipeline and via the Nord Stream 1 pipeline under the Baltic Sea. Germany is Europe's biggest natural gas consumer and apart from Russia, receives pipeline gas from Norway, the Netherlands, Britain and Denmark. It also imports liquefied natural gas (LNG) via LNG terminals mainly on northwestern European coasts.

A sudden stop in deliveries of Russian gas could trigger a recession in Germany comparable with those in 2009 and 2020, if not worse, a study from the IMK institute said this week. Analysts at Aurora Energy Research said in a strategy report that if LNG gradually replaced Russian gas, gas prices could be pegged at 40 euros per megawatt hour (MWh) by 2030. Current crisis-induced LNG prices are double that.

Aurora said an immediate import stop would see gas prices spike to 200-260 euros/MWh in 2022. Germany is trying to quickly switch to floating LNG terminals of its own, to fill gas stocks in the summer, and to try and find ways to prioritise gas distribution in case of a crisis, within a European context.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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