FSUOGM: What if Nord Stream 1 doesn’t come back online?

The Nord Stream 1 pipeline closed down on July 11 for routine maintenance that was planned well in advance, and which takes place every summer. While under normal circumstances the 10-day closure would be no cause for alarm, European officials have raised the possibility that Moscow may keep the 55bn cubic metre per year pipeline offline for longer, in order to further destabilise European energy markets.

The EU consumed 412 bcm of natural gas in 2021, and Russia covered around 155 bcm of this demand, giving it a market share of just under 40%. However, due to Russia cutting supply off to a number of buyers earlier this year for failing to comply with its rubles-for-gas decree, and a curtailment in supply via Nord Stream 1 last month, June shipments slumped to a record low of 4.7 bcm, or 56.4 bcm on an annual basis. In comparison, deliveries in June last year totalled 12 bcm.

The good news is that despite this reduction in supply, Europe has so far managed to continue increasing the amount of gas it has storage, albeit at a slower rate than previously envisaged. Its underground storage facilities were filled to 61.6% capacity as of June 9, which is close to the average utilisation rate for this time of year over the past decade.

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