Germany suspects sabotage hit Russia’s Nord Stream pipelines

GERMANY suspects the Nord Stream gas pipeline system was damaged by an act of sabotage, in what would amount to a major escalation in the standoff between Russia and Europe.

According to a German security official, the evidence points to a violent act rather than a technical issue. Swedish seismologists detected two explosions in the area on Monday, when leaks appeared almost simultaneously in the Baltic Sea.

It’s the clearest signal yet that Europe will have to survive this winter without any significant Russian gas flows, and potentially marks a major escalation in the broader conflict between Moscow and Ukraine’s allies.

The pipelines were already out of action, but any hope that the Kremlin might have turned the taps back on at some point have now been dashed. Gas prices jumped, and Denmark moved to bolster security around its energy assets.

“It’s hard to imagine that these are coincidences,” Mette Frederiksen, Denmark’s prime minister, told reporters Tuesday. “We can’t rule out sabotage.”

The leaks on the Nord Stream pipelines are forming an area of natural gas bubbles in the Baltic Sea, a video released by the Danish army on its website showed.

Kremlin spokesman Dmitry Peskov said that before the results of an investigation, it was premature to speculate on possible sabotage. “Nothing can be ruled out,” he said.

Russia has been squeezing energy supplies to Europe for months, engaging in a cat-and-mouse game as it tries to exert maximum pressure on Ukraine’s allies. Europe has responded by filling up gas stores and trying to source alternative supplies. For now, it looks like those efforts will be enough to get Europe through this winter, though questions remain over the following one. The bloc got about 40% of its pipeline gas from Russia before the war, a figure that now stands at about 9%.

It’s not the first time there have been suggestions of foul play at energy sites since the war started. European leaders have accused Moscow of weaponizing energy flows for months, and of using maintenance and repair issues as pretexts for halting supplies. Then last week, Russia said it had thwarted an attack on an oil and gas complex that supplies Europe.

Back in July, Bloomberg reported that the Kremlin was likely to keep vital gas flows to Europe at minimal levels as long as the standoff over Ukraine continues to ratchet up pressure on the continent.

German, Danish and Swedish authorities are investigating the leaks, which were so big they were seen on the radars of vessels in the vicinity. The leaks are from Nord Stream — which was still sending reduced volumes of gas to Europe until what Moscow described as a technical problem stopped flows earlier this month — and Nord Stream 2 — a project that was shelved just as it neared completion shortly before the war started.

“We have seen that it is part of the Russian war strategy to play actively with the gas market,” said Patrick Graichen, deputy to Germany’s economy minister. “Just as Nordstream 1 was shut off under murky circumstances, Putin is good for anything.”

Denmark has sent a warship as well as an environmental vessel and a helicopter to the area, the Danish Armed Forces said. The energy and climate ministry said earlier it registered gas leaks from both Nord Stream and Nord Stream 2 in its exclusive economic zone in the Baltic Sea, and that of Sweden too.

Unprecendented Damage

Nord Stream, which is majority-controlled by Russia’s Gazprom PJSC, said it was impossible to say when the damage could be fixed.

“The destruction that happened within one day at three lines of the Nord Stream pipeline system is unprecedented,” the operator said Tuesday. “It’s impossible now to estimate the timeframe for restoring operations of the gas shipment infrastructure.”

Benchmark European gas prices climbed as much as 12% on Tuesday, after four days of losses.

“Prices are also trading higher on speculation that this was sabotage, although what that would mean remains highly speculative,” said James Huckstepp, head of EMEA gas analytics at S&P Global Commodity Insights. S&P Global Commodity Insights has already assumed that remaining Russian gas flows to Europe will fall to zero before the end of the year, he said.

The gas leaks also pose environmental and safety risks. Each ton of natural gas dumped into the atmosphere has nearly 80 times the warming impact of carbon dioxide. On Monday, the Danish Maritime Authority advised vessels to avoid areas south and southeast of Bornholm island after detecting several gas leaks in the vicinity of the pipelines.

“We want to monitor thoroughly Denmark’s critical infrastructure in order to strengthen the security of supply going forward,” Kristoffer Bottzauw, head of the Danish Energy Agency, said in a statement.

The Swedish Maritime Administration banned vessels from entering an area within five nautical miles of both Nord Stream 1 and Nord Stream 2, citing damage, leakage and “explosive gas in the vicinity.”

The Swedish coast guard is monitoring the area by plane.

No Nord Stream leaks have been detected in Finland’s exclusive economic zone, Petteri Salli, officer in charge at the Gulf of Finland Coast Guard District, said by phone.

The damage to the pipelines has had no impact on adjacent onshore gas infrastructure in Germany, network operator Gascade said. – BLOOMBERG