How will Nord Stream accidents change the world?

What will happen to the world after Nord Stream accidents?

On Tuesday morning, September 27, Gazprom's subsidiary Nord Stream AG announced unprecedented damage that was caused to the company's two gas pipelines that run along the bottom of the Baltic Sea to Germany — Nord Stream and Nord Stream 2.

"The destruction that occurred on one and the same day simultaneously on three strings of the offshore gas pipelines of the Nord Stream system is unprecedented,” the report says. "The time that would be required for the restoration of the gas transmission infrastructure is still impossible to estimate.”

Seismologists in Denmark and Sweden recorded powerful explosions in the areas where there were leaks from the Nord Stream gas pipeline.

Nord Stream is an export gas pipeline from Russia to Europe that runs across the Baltic Sea. The pipeline was built in exclusive economic zones of Russia, Finland, Sweden, Denmark and Germany. It also stretches through the territorial waters of Russia, Denmark and Germany.

The capacity of the two strings is estimated at 55 billion cubic meters of gas per year. The length of the system is 1,224 km. The Nord Stream operator is Nord Stream AG. Nord Stream is primarily controlled by Russia's Gazprom (51%), Germany's Wintershall Dea and E.ON — 15.5% each, Denmark's Gasunie and France's Engie — 9% each.

The investment in the project was evaluated at €7.4 billion. The construction of the gas pipeline in the Baltic Sea began in April 2010. In November 2011, the first string of the Nord Stream was commissioned. The second one was put into operation in October 2012.

Over the summer of 2022, the volume of gas transportation through Nord Stream dropped to 20% of its maximum capacity — from 167 million to 35 million cubic meters per day. Gazprom explained the problem with difficulties to return gas turbines from Canada, where they had undergone technical maintenance. The Canadian authorities did not want to return the turbines due to anti-Russian sanctions. The unit was eventually delivered to Germany, but Gazprom refused to accept the turbine without documentary evidence that would prove that the sanctions would not affect further transportation and repairs. In late August, Gazprom completely stopped supplies through the pipeline to repair the only remaining gas pumping unit at the Portovaya compressor station. Nord Stream was supposed to be launched on September 3, but the day before, Gazprom announced an oil leak at the unit. Gas transportation was stopped indefinitely.

The construction of Nord Stream 2 with a capacity of about 55 billion cubic meters and a length of more than 1,200 km began in September 2018. The pipeline was completed in September 2021, despite US sanctions. In October last year, one of the gas pipeline strings was filled with technical gas. By the end of the year, both pipes were filled with technical gas. However, the system was never put into operation as Germany suspended its certification after Moscow recognized the independence of the DPR and LPR republics in Donbas.

The project was built with the help of Gazprom's European partners, but Gazprom has 100% control of it. European partners provided 50% of funding in the form of loans. The project budget was estimated at €9.5 billion. In March 2022, one of Gazprom's partners, Wintershall Dea, wrote off about €1 billion of investments at the Nord Stream 2 gas pipeline construction project.

According to Nord Stream 2 AG, the accident occurred in the Danish exclusive economic zone southeast of the island of Bornholm.

"A preliminary assessment shows that the leak occurred on one of the two branches of Nord Stream 2 in the Danish economic zone southeast of Bornholm <…>, from where the natural gas is leaking,” the Danish Maritime Authority said in a statement.

The Danish Maritime Authority stated that there were no security threats associated with gas leakage outside this exclusion zone.

Late on the evening of September 26, the Nord Stream operator announced a pressure drop on both strings of the Nord Stream gas pipeline. On the morning of September 27, Nord Stream said that physical damage that was caused to the pipeline led to violations of the tightness of the gas pipeline.

Experts discuss two possible reasons for the "alleged attacks," Tagesspiegel said. First, damage to the pipelines could be caused by Ukrainian forces or forces associated with Ukraine. Ukraine has its own gas transmission system and has always opposed the construction of Nord Stream.

Another version says that it was Russia that conducted a false flag operation to cause additional uncertainty and push gas prices higher to further exacerbate the European energy crisis, Tagesspiegel wrote.

Spiegel wrote with reference to its sources that a few weeks ago, the United States warned Berlin about potential attacks on gas pipelines in the Baltic Sea. According to the publication, Berlin received a message from the US Central Intelligence Agency in summer.

A spokesman for the German government told Spiegel that the cabinet does not comment on any issues related to any intelligence data or activities of special services.

Swedish Foreign Minister Ann Linde said on September 27 that the damage to the pipelines was caused by explosions.

"Gas leaks at Nord Stream and Nord Stream 2 in the exclusive economic zones of Denmark and Sweden occurred as a result of explosions, probably caused by sabotage,” the minister said adding that the Swedish authorities continue collecting information about the accident, its possible causes, actors and motives.

Moscow does not rule out that the damage to the pipelines was caused as a result of deliberate and targeted attacks.

"This is very disturbing news," Kremlin's spokesman Dmitry Peskov told reporters.

EU foreign policy chief Josep Borrell said that the European Union would support "any investigation to establish the causes of the accident.

The accidents at Nord Stream pipelines will not affect gas supplies to Europe and Denmark, as none of the gas pipelines was functioning, the Danish Energy Agency said. Nord Stream 2 was never launched, whereas supplies via Nord Stream have been suspended since September.

According to analysts at Sinara investment bank Sinara, repairs to Nord Stream could take months. Sanctions make all necessary repairs impossible unless the parties come to a definite decision. Europe may go through the winter heating season saving and reducing gas consumption while purchasing liquefied natural gas. Without Gazprom's pipes, winters in Europe are never going to be easy and warm.

More than half of the gas from the damaged Nord Stream and Nord Stream 2 gas pipelines has already leaked. The remaining gas is to run out by the end of the week, October 2, the Danish Energy Agency said.

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Author`s name Andrey Mihayloff
Editor Dmitry Sudakov