European gas prices soar as Russian pipe shutdown looms

The spot price of gas in Europe continued to rise after reports of new repairs on the Nord Stream highway and broke the $3,000 per thousand cubic meters bar. The price of the nearest September TTF futures on Monday afternoon reached a price of $3,024/thousand cubic meters.

Since the beginning of August, the average price for TTF was $2,237, while in July gas was traded at an average of $1,764. The historical maximum of gas prices in Europe was recorded on March 7, 2022, when the April futures at some point reached the value of $3,898 per thousand cubic meters.

Last Friday, Gazprom announced that gas supplies via the Nord Stream will stop during the repair of the only turbine. It will be stopped on August 31 for three days. After completion of the works, gas transit will be restored to the level of 33 million cubic meters per day. The news caused an instant rise in spot gas quotes to new levels.

In general, the pipeline is capable of transporting up to 167 million cubic meters of gas per day, but its capacity has decreased due to a violation of the maintenance schedule of the equipment of the starting station of the marine highway, the Portovaya compressor station.

The gas pumping units of Rolls-Royce, whose gas turbine business was transferred to Siemens, are installed at the station. The Russian side indicates that the supply restriction is related to the sanctions of Canada. To date, Siemens Energy has reported that all the documents necessary to send the turbine to Russia are ready, and the company is waiting for the Russian Federation's permission to import.