Gas pipeline
© Getty Images / wolvRussia's Gazprom has slowed deliveries from the Nord Stream pipeline, citing technical issues caused by Western sanctions
Berlin has condemned Russian energy giant Gazprom's decision to cut the gas flow through the Nord Stream pipeline over technical difficulties, with the country's economy minister, Robert Habeck, claiming the move was politically motivated.

"I have the impression that what happened yesterday is a political decision and not a decision that can be justified in technical terms," Habeck told reporters on Wednesday.

Comment: Well, that's his uninformed 'impression', what's the reality?

The Saint Petersburg energy giant said it would reduce the capacity of gas supplies via the Nord Stream pipeline by 67 million cubic meters per day to some 100 million cubic meters. The company explained it had to halt operations at one more Siemens pumping unit, blaming the technical issues on Western sanctions. Namely, the repaired gas pumping units for the North Stream pipeline cannot be returned from a factory in Canada due to the country's embargoes against Russia.

Comment: Germany rejected the approval of the Nord Stream II to appease the US, had it not done so these repairs, even with the sanctions, could have gone ahead and Germany would likely not even notice a difference in gas supplies.

"Due to the expiration of the time before overhaul (in accordance with the instructions of Rostekhnadzor and taking into account the technical condition of the unit), Gazprom is halting the operation of another Siemens gas pumping unit at the Portovaya compressor station," the company said.

Habeck, however, challenged this assessment, expressing doubts that switching off a single unit could actually affect some 40% of the flow. The minister also said the maintenance work on the pipeline that would have had a "relevant" effect on the flow was due to be carried out by Siemens only in the fall of this year.

Comment: Would Habeck prefer that Germany suffers a 40% drop in energy supplies in winter instead?

Habeck also claimed that the maintenance work isn't subject to sanctions on Russia, revealing that he personally consulted with the European Commission on this matter. Berlin is also in talks with Ottawa to determine whether the pumping units stuck in Canada are included in the sanctions or not, Habeck said.

The Nord Stream, running under the Baltic Sea, connects the Portovaya compressor station in Russia to its counterpart in Greifswald in northeastern Germany. The European market receives some 55 billion cubic meters of gas per year via the pipeline.

European gas prices spike as anti-Russia sanctions affect flow

Prices for natural gas in Europe surged on Wednesday after Russian energy giant Gazprom announced plans for further cuts to supply volumes via the Nord Stream pipeline.

Futures on the Netherlands-based TTF trading hub climbed over $1,300 per 1,000 cubic meters, marking a surge of nearly 25%.

Earlier this week, prices in the region spiked by nearly 11% after Gazprom said it was reducing gas deliveries via the Nord Stream pipeline after German company Siemens failed to return gas pumping units to its compressor station on time.

Comment: It sounds like there could be some tit-for-tat on the Russian side here, but it's actually in Europe's interests to get this sorted out sooner rather than later; and perhaps reducing supply is one way of speeding things up.

Overall gas flows via the Nord Stream pipeline will decrease by roughly 60%, from 167 million cubic meters per day to just 67 million cubic meters, according to Gazprom.

The Saint Petersburg energy giant said it was forced to reduce gas supplies to Germany via the Nord Stream pipeline this week due to the parts shortage. Siemens announced on Wednesday that it was impossible to deliver the gas turbines to Gazprom after they'd been repaired in Canada, due to the sanctions imposed on Russia.

It added that the German and Canadian governments were aware of the problem, and that it was working on a viable solution.