The photo shows a huge flame rising above the forest: Finnish public broadcaster Yle used this image to illustrate a report this week that Russia began flaring large amounts of gas that could no longer be sent to Europe.
Catarina Wagner
Business correspondent for Russia and the CIS based in Moscow.
The flame appeared on June 17 at the Portovaya compressor station near the Finnish border, shortly after Kremlin-controlled gas company Gazprom significantly reduced deliveries to Germany via the Nord Stream 1 pipeline for the first time – to first 60, then 40 percent of capacity. Gazprom is now allowing only 20% of the possible volume of gas to flow through the pipeline, which starts at Viyborg near Portovaya.
In the report, Yle refers, on the one hand, to eyewitnesses like the author of the photo, a man from Hamina in the Gulf of Finland, who claimed the flame was clearly visible from the Finnish coast near the Russian border at night. On the other hand, the transmitter relies on data from the American space agency Nasa. Its global fire monitoring service “Fire information for resource management systems” shows fire near Portovaya station from mid-June, i.e. from the moment Nord Stream 1 deliveries were throttled. Gazprom has so far left a FAZ inquiry unanswered; there is no official information on what Gazprom will do with the excess gas.
Closed individual wells?
But Russian storage facilities should have been full by now. And without European customers, for whom around 83% of Russian natural gas exports were before the war against Ukraine, Russia has almost no sales opportunities: unlike oil, which can be transported by tankers, Russia depends on pipelines to transport natural gas.
As there is only one pipeline to China so far, which is not yet fully resilient, Russia cannot sell excess gas to Asian customers. This is leading to a dramatic drop in gas exports – in July they were 58% lower than in the same period last year, but also a significant drop in gas production: According to data from Gazprom, in July it was 36% below the same period last year and therefore at a minimum level since 2008.
This suggests that Gazprom may have already started closing individual wells. Making these functional again later is considered extremely difficult and expensive.
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Moscow reduced gas deliveries to Germany in mid-June, citing a missing Siemens turbine at Portovaya, which was stranded in Canada after maintenance due to Western sanctions. According to the federal government and Siemens, however, this is not a reason for the reduction in deliveries, as six more turbines are ready at Portovaya, of which only one is in operation. Gazprom says the five idle turbines will also have to go to Canada for maintenance and is demanding written assurances that maintenance will take place with impunity through sanctions.
Without such a guarantee, gas deliveries would likely continue at the current low level, said Katja Yafimava of the FAZ’s Oxford Institute for Energy Studies, until the last turbine “reaches its limit”. However, reduced deliveries are already having an impact on the Russian economy: gross domestic product fell by 4.9% in June, following a 4.3% drop in May.