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September 5, 2022

Russia halts supply of gas from Nord Stream 1 to Europe

The move has led to the launch of financial aid by Germany, Sweden, and Finland to bailout their energy firms.

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Gazprom has decided to cease gas supply to Europe via the Nord Stream 1 pipeline indefinitely in response to a decision taken by members of the G7 to impose a price cap on Russian oil.

Gazprom abruptly cancelled the restart of the gas flow scheduled for 3 August 2022 following a three-day halt for maintenance of the pipeline, citing an oil leak in a turbine.

Siemens AG unit Siemens Energy, which services the turbine of the Nord Stream 1 pipeline, said such a leak should not impact the operations of the pipeline.

The Portovaya compressor station, where the leak was identified, operates another turbine to keep the pipeline operating.

Reuters quoted the company as saying: “Such leaks do not normally affect the operation of a turbine and can be sealed on site. It is a routine procedure within the scope of maintenance work.”

Commenting on the decision, European Council president Charles Michel said on Twitter: “We will accelerate our path towards energy independence.”

The German Network Agency was quoted by Bloomberg News as saying: “The situation is tense and a further deterioration of the situation cannot be ruled out.

“However, gas supply in Germany is stable at the moment. Security of supply in Germany continues to be guaranteed at present.”

Prior to the latest maintenance period, Gazprom reduced the flow from the pipeline to just 20%.

In the wake of surging gas shortages, European nations including Germany, Finland, and Sweden announced financial support packages for their energy firms to help with the soaring energy prices.

Germany announced a €65bn package of measures, including one-off payments to the most vulnerable firms and tax breaks to energy-intensive companies, reported BBC News.

Sweden and Finland unveiled credit guarantees of up to $23bn and $9.95bn, respectively, for its electricity companies to avoid a financial crisis, reported Reuters.

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