Last Thursday Europe was pleased to see gas flows return through the Nord Stream pipeline after a 10 day pause for regular maintenance, even if flows were limited to 40% of capacity due to a turbine still trapped overseas, and unable to be used to effect a repair that would allow full capacity transmission. Coming on the heels of Russia declaring force majeure on gas delivery contracts due to unforeseen conditions, some had assumed Russia would fail to restart flows through the pipeline as a punitive measure for economic sanctions imposed over the war in Ukraine.

However the restart came with a catch. Russia declared it would need to remove a turbine and ship it overseas for maintenance, and that would halve the 40% flow presently, reducing flows through the pipeline to a mere 20%.

Russia has now announced the flows will be cut effective at 7AM Moscow time, July 27th, to service a turbine at its Portovaya compressor station.

Bloomberg energy expert Javier Blass says that with, “Nord Stream 1 flowing at just 20% of capacity from July 27, Germany will NOT have enough natural gas to make it throughout the whole winter **unless big demand reductions are implemented**. Berlin will need to activate stage 3 of its gas emergency program.”

Stage 3 of Berlin’s emergency energy plan would entail rationing of gas supplies, and a significant impact to Germany’s industrial capacity and overall economy.

European Natural gas jumped 10% on the news.

Russia has stated that once it receives the other turbine which had been trapped in Canada, it will install it and flows would return to 40% again. The export license paperwork was finally delivered to Gazprom by Siemens on the 25th, and the turbine should arrive in the next day or so. However Europeans are pessimistic given the current geopolitical situation, and the continued threats to European economies will take their tolls on investor sentiment.