General attempts for a Europe without Russian gas, Gazprom has announced that from July 11-21 both strands of the Nord Stream gas pipeline will be shut down for “planned repairs”. For example, the main line connecting Russia with Europe will be closed to “test mechanical components and automation systems.” Beyond the official motivation, there is a strong hypothesis that this was a conscious decision by Moscow and that Germany is now trembling at the consequences for its economy.
Meanwhile, replacing Russian gas supplies ahead of winter is a race against time, and if global LNG exports to Europe have increased by 75% since March compared to 2021 (US exports to Europe have almost tripled), Gazprom reduced gas exports to countries outside the Commonwealth of Independent States (CSI, former Soviet republics) by 31% in the first six months of 2022. Unsurprisingly, for the first time in the history of the European Union, more liquefied natural gas is being imported from the United States than is being imported from Russia via pipelines.
Given the complexity of the situation, the European Commission is considering an emergency energy plan to be presented in mid-July, as European Commission President Ursula von der Leyen said: “These are difficult times. Russia is intentionally cutting off some of our gas supplies. We must be prepared. Together with the Czech Presidency, we are preparing an emergency plan for Europe. There will be two key points. We must have a clear idea of where to find the fuel or elements we need so that we can find them quickly and easily. But we must also have an important European Energy Solidarity Plan”.
Already, European Union gas demand fell by 27 billion cubic meters in the first half of 2022 compared to the same period last year, leading to a global decline in gas consumption. Despite this, according to Arera, the price of the gas bill for Italian families has increased by 70.7% (with a 91% increase in the electricity bill) and, according to President Stefano Besseghini, it is difficult to predict the next few months because “we are dealing with with a Russian interlocutor who currently holds the cards”.
Vladimir Putin is aware of this and continues to use gas as a geopolitical weapon. The most recent decision, in chronological order, is the signing of a decree transferring the rights to the Sakhalin 2 gas and oil field in Asia to a new Russian company, acquiring the foreign shares and citing the choice on grounds of national interest and security.
Shell holds 27.5% of the shares in the Maxi field, and the Japanese Mitsubishi (10%) and Mitsui & Co (12.5%) are also shareholders. When Shell announced its intention to sell its stake in Ukraine after the war last March, Japanese Prime Minister Fumio Kishida said Japan would not abandon the field, most of whose gas is shipped to Tokyo in liquefied form.
The Kremlin’s decision comes days ahead of the G7, which also included Japan, whose energy needs account for 8.8% of Russia’s natural gas, mainly from Sakhalin 2. It is now clear that the Russian response to sanctions is not limited to Europe, but is also reaching out to Asia in a scenario that is increasingly taking on global contours.