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Russia Says Warship Guarding Pipelines Attacked By Ukraine

Russia Says Warship Guarding Pipelines Attacked By Ukraine

A Russian warship guarding pipelines…

Putin's Power Play: Nuclear Provocations On The Rise

Putin's Power Play: Nuclear Provocations On The Rise

The internal instability in Russia…

Cyril Widdershoven

Cyril Widdershoven

Dr. Cyril Widdershoven is a long-time observer of the global energy market. Presently he works as a Senior Researcher at Hill Tower Resource Advisors. Next…

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European Energy Security Faces New Risks With Nord Stream Explosions

  • The leakages and explosions at the Nord Stream and Nord Stream 2 pipelines take the European energy crisis to another level.
  • Analysts are worried that the leakages and explosions on both lines are not an incident but linked to the launch of the Baltic Pipe.
  • A disruption of Norwegian energy supplies to the European Union or the UK could lead to faster depletion of natural gas storage facilities in Europe this winter.

The temporary optimism among European politicians and governments about a less volatile natural gas market during the winter of 2022-2023 has come to an end. Just as market fundamentals seemed to be strengthening as a result of rising storage volumes and lower demand, there are a number of new risks.

First of all, the Dutch government announced this week that Europe’s largest onshore gas field Groningen will be put on the back burner, with gas production of less than 2 BCM, as predictions showed no extra volumes are needed anymore. The reality, however, might be more difficult to predict. With a longer duration of the Ukraine war, possibly even with a nuclear scenario at play, and EU sanctions on Russian oil on the horizon, the market is potentially heading for a dark scenario.

In all existing scenarios, even those of the Dutch government, Russian natural gas would be still flowing in the next couple of months, albeit at very low levels. At the same time, new supply has been studied, not only LNG imports but also the potential of the new Baltic gas pipeline which has now been opened in Poland. Optimism however is a bad advisor, as we can see today. 

Nord Stream 1 and 2 have been hit by leakages and explosions on Tuesday. Danish authorities already have warned vessels to steer away from the island of Bornholm, as a gas leak has been reported at the Russian-owned Nord Stream 2 gas pipeline. Nord Stream AG, the operator, also said that Nord Stream 1 has operational issues, including a power drop in both lines. On Monday, the German regulator had already stated that the pressure in Nord Stream 2 had dropped from 105 to 7 bars. Both gas pipelines are currently already empty, as Russia has cut off gas supplies before.  Related: Xi Is Set To Be Re-Elected As China’s Leader

Analysts are worried that the leakages and explosions on both lines are not an incident but linked to the launch of the Baltic Pipe, which carries Norwegian gas to Poland. It is rather coincidental that both Russian offshore gas pipelines are hit at the same time, or even just before the opening of another pipeline. The current developments already have led Danish operators and companies to increase their security levels.

Kristoffer Bottzauw, Denmark’s energy agency director, stated that Denmark wants to ensure thorough oversight of the country’s critical infrastructure to strengthen its security of supply. Sweden is not yet increasing its preparedness levels but is following all very closely. 

Without any doubt, the growing geopolitical and energy security position of Norway for the European market is being closely followed by Russia. Since the start of the Russian invasion of Ukraine, Norway has steadily increased its market share and volumes in the European market, partly at the cost of Russia. Additional Norwegian supplies to Europe are to be expected, which is something that Moscow is not going to take lightly. 

Norway has been for decades in the crosshairs of Russia (or the Soviet Union), as the Scandinavian giant is part of NATO. It controls access routes to major Russian naval and commercial ports, especially during the winter season. After Sweden and Finland are now also joining NATO, more military power is now concentrated on the northern border of Russia, at least that’s how Moscow sees it. Norway’s growing energy influence could clearly become a target of Russian subversive activities if Moscow wants to hit Europe during winter.

Last week, Norway has also reported increased activity of unknown and unidentified drones close to crucial offshore oil and gas infrastructure. Norway’s Petroleum Safety Authority (PSA) has now openly warned about the presence of unidentified drones near offshore oil and gas facilities. The PSA stated that operators have reported the presence of drones during the last couple of months, highlighting the potential of “deliberate attacks”. As the PSA said “we urge increased vigilance, revised emergency preparedness and incident response measures, and information sharing.” 

Even though no official connection has been made with state actors, the current situation could become very volatile in case of further escalation on the Ukrainian front. The security of offshore energy production, especially in the North Sea, is still very weak. A potential aggressor could without any doubt take advantage of the situation and deal significant damage to Europe’s energy market during the coming months. Norway’s offshore oil and gas infrastructure is a highly strategic target for Moscow. Putin could, and most probably, will exploit additional energy infrastructure weaknesses this winter. Not only other Russian oil and gas pipelines will be seeing unexpected technical issues or sabotage, but third parties could also become a target.

A disruption of Norwegian energy supplies to the European Union or the UK could lead to faster depletion of natural gas storage facilities in Europe a potentially add to the already existing chaos in the energy market.

By Cyril Widdershoven for Oilprice.com

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Leave a comment
  • Robert Berke on September 28 2022 said:
    Polish foreign minister thanks US for blowing up Russian pipelines.

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