European natural gas prices jumped Monday as the region braced for another gas pipeline shutdown by Russia. Front-month Dutch TTF natural gas futures shot up 19% to a fresh record high of 291 euros per megawatt hour. Russia’s Gazprom will run a three-day maintenance check on its Nord Stream 1 pipeline starting August 31. Loading Something is loading.
European natural gas prices soared Monday in anticipation of another Russian shutdown of a key energy pipeline later this month as the region scrambles to gather supplies for the winter season.
Russia’s state-run energy company Gazprom on Friday unexpectedly said it would close the Nord Stream 1 pipeline for maintenance between August 31 and September 2.
A Trent 60 gas compressor unit “must undergo technical maintenance every 1,000 hours,” including cleaning and checks for cracks and dents, Gazprom said in a statement. Gas transmission will resume at the rate of 33 million cubic meters per day if no malfunctions are detected, it said.
Front-month Dutch TTF natural gas futures shot up 19% to a fresh record high of 291 euros per megawatt hour. The euro, meanwhile, briefly fell below parity against the US dollar on Monday.
The “three-day pause will once again raise fears that the Kremlin will weaponise gas supplies and use the maintenance as an excuse not to resume flows. With storage still below where the EU wants going into the winter, that means a greater risk of shortages and much higher prices,” Craig Erlam, senior market analyst at forex trading firm Oanda, said in a note.
Russia has been squeezing gas flows into Europe since the Kremlin launched its war against Ukraine in late February. Gazprom in July shut down the pipeline for 10 days for scheduled annual maintenance and had previously reduced gas flows to 20% of its capacity, citing technical problems.
But European officials have said the supply cuts are retaliation for sanctions imposed after Russia invaded Ukraine, not technical issues.
Meanwhile, EU countries have been working to stockpile natural gas to last throughout winter. Germany is also facing the challenge of low water levels on the Rhine river, a key route for large barges that transport fuel.
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