Nord stream | Business Upturn

Ukraine War: Russia keeps Nord Stream 1 shut

Pranay Maniar — Sat, 03 Sep 2022 07:34:24 +0000

As the war in Ukraine reaches a stalemate, the Russians have seemed to have halted gas supplies to the European Union over their support for Ukraine.

The Nord Stream gas pipeline runs from the coast of Russia near St. Petersburg to northeastern Germany and has a daily capacity of 170 million cubic metres and now has completely shut off the transportation of gas to Germany.

Berlin and Moscow were building the Nord Stream 2 which would run parallel to the existing pipeline and will have a capacity of 55 billion cubic metres, doubling the existing gas supply.

The pipeline is owned and operated by the company Nord Stream AG, whose majority owner is the Russian gas-producing giant Gazprom. Grazprom has cited maintenance as the cause of the shutdown of the pipeline.

The Russian gas company stated that a fault had been detected in the Portovaya compressor station, with the inspection carried out alongside workers from Siemens, the German firm that maintains the turbine.

It claimed that only specialised workshops which had been constrained by Western sanctions could repair oil leaks in major engines.

However, Siemens itself said: “Such leaks do not normally affect the operation of a turbine and can be sealed on site. It is a routine procedure within the scope of maintenance work.”

Moscow has substantially reduced the supply of gas to Europe since the war in Ukraine started, however, this is the first time the supplies have been completely cut-off.

The European Union fears that Moscow’s move of shutting down gas supplies will lead to gas prices becoming unaffordable for heating in the upcoming winter.

EU Council President Charles Michel said the Russian move was “sadly no surprise”.

“Use of gas as a weapon will not change the resolve of the EU. We will accelerate our path towards energy independence. Our duty is to protect our citizens and support the freedom of Ukraine,” he tweeted.

The gas supply cuts have led to energy costs to soar with businesses and common consumers paying high prices.

Most of Europe is heavily reliant on Russian gas for heating and generating energy, we saw Germany filling up its gas supplies rapidly. Germany has filled around 85% of its storage.

The goal to reach 95% by November 1 looks bleak.

The timing of the cuts is rather interesting as it comes shortly as G7 nations (US, UK, Italy, Germany, France, Canada, Japan) have decided to cap the price of Russian gas.

Joe Biden levies heavy sanctions on Russia; 80% financial institutions will take a hit

Mymun Malik — Fri, 25 Feb 2022 10:36:00 +0000

US President Joe Biden has unleashed the strictest sanctions any country has ever faced. He and his European counterparts came up with a plan of action to cripple the Russian economy to dust.

The new set of sanctions will bring the financial institutions down by 80%, by excluding Russian banks from global markets, by taking away access to the US dollar, by denying any US technology crucial to aerospace, maritime and defense industries.

European leaders met in an emergency meeting in Brussels on Thursday evening. They have come up with one of the strictest sanctions any country has ever faced. These sanctions are to cripple the Russian economy in no time.

On Thursday Russian stock markets saw a 30% hit and soon will crash with the strict sanctions that follow. Putin will turn into an outcast as Russia will be barred from international markets.

The United States will also halt 13 prominent Russian companies, which includes Gazprom, a state-run energy conglomerate to raise capital in western markets. Biden has also decided to penalize families who are close to Putin.

Analysts predict that these sanctions will outrightly cripple the Russian economy on a short-term basis and in the long run, it will be managed somehow, however, the restriction of access to US technology will cripple the industries like Maritime, Defense and Aerospace.

EU has declared complete restrictions to access huge bank deposits and several technological exports to Putin’s Russia; the list also includes semiconductors, lasers, communications equipment and computers. Australia along with japan also unleashed stricter sanctions.

As of now the United States and European officials will not completely restrict Russian banks to access SWIFT, This Belgian money transfer system is a protocol followed by 11,000 banks globally. However, Biden’s administrative official said it could be considered later.

Biden says for now these sanctions are enough to cripple Putin, and no further restrictions will be awarded to Russia, as its economy depends on energy exports. And Global leaders do not want the oil and gas prices to rise as European countries depend on these products. Although, this week Germany stopped the Nord Stream 2 gas pipeline project.

Germany ceases Nord Stream 2 gas pipeline agreement as to counter Russia

Himanshu Mishra — Tue, 22 Feb 2022 17:07:10 +0000

Germany has taken steps to halt the procedure of certifying the Nord Stream 2 gas pipeline from Russia, Chancellor Olaf Scholz announced Tuesday, as the West started seizing punitive measures against Kremlin on the Ukraine crisis. The ruling, which was denounced by Moscow, is a crucial move for the German government.

Scholz announced that his government made the decision in reaction to Russian President Vladimir Putin’s announcement of the independence of two breakaway regions in eastern Ukraine that he told marked a “serious break of international law.”

“Now it’s up to the global community to answer to this one-sided, incomprehensible and unjustified activity by the Russian president,” he said to reporters in Berlin, adding that it was necessary to “send a clear signal to Kremlin that such actions won’t continue without consequences.”

Until now, Berlin had long withstood pulling the plug on the project, even after strong pressure from the United States and some European nations to do so. Washington has for years also asserted that building another pipeline carrying natural gas from Russia to Germany — particularly one that bypasses Ukraine — boosts Europe’s reliance on Russian energy supplies.

U.S. officials have also notified that Nord Stream 2 poses dangers to Ukraine and Poland because it could permit Russia to stop pumping gas through those countries. Scholz’s predecessor Angela Merkel had upheld the project, as have prominent pictures in Scholz’s centre-left Social Democratic Party.

“The problem now is fundamentally different,” Scholz announced on Tuesday, saying that the government had concluded to withdraw a report on the effect that the pipeline — which hasn’t started operating yet — would have on the assurance of Germany’s gas supplies.

“That may sound technical, but it’s a necessary administrative step without which the certification of the pipeline cannot happen now,” he announced. Scholz expanded that Germany’s Economy Ministry would reassess the problem in light of the latest growths.

“That will clearly take time, if I may say so,” he added. The company that employs Nord Stream 2 declined sudden comment. White House spokeswoman Jen Psaki announced on Twitter that the U.S. administration had closely consulted with Germany overnight and greeted the statement.

“We will be following up with our own measures today,” she announced on Twitter.

Germany joins about a quarter of its energy needs with natural gas, a share that will boost in the coming years as the country switches off its last three nuclear power plants and stages out the use of coal. About half of the natural gas utilized in Germany comes from Russia.

The government intends to end the use of all fossil fuels in Germany by 2045. Ukrainian Foreign Minister Dmytro Kuleba applauded Germany for cancelling the certification of the pipeline. “This is a morally, politically and practically correct step in the current circumstances,” he penned on Twitter. “True leadership means tough judgments in difficult times. Germany’s move confirms just that.”

But Russia’s former president, Dmitry Medvedev, crashed the German government’s decision to halt certification of the pipeline. “Welcome to the bear new world where Europeans are very soon going to pay 2,000 euros for 1.000 cubic meters of natural gas!” announced Medvedev, who is now deputy chair of Russia’s Security Council.