Europe faces further energy supply disruption due to damage to a pipeline system carrying oil from Kazakhstan through Russia, according to Reuters.
The Caspian Pipeline Consortium (CPC), which handles around 1% of global oil and is majority-owned by Russian firm Transneft, announced the news, adding to concerns about a decline in gas supplies.
CPC stated that two mooring points at a Black Sea Terminal, SPM-1 and SPM-2, were suspended due to damage at “the attachment points of underwater sleeves to buoyancy tanks.”
Russian state-owned oil and gas giant Gazprom announced unscheduled maintenance on the Nord Stream 1 pipeline, which runs beneath the Baltic Sea to Germany.
The unprecedented move could hinder Germany’s and much of Europe’s efforts to replenish gas reserves, avoid widespread rationing to keep its population warm during the winter and avoid future factory shutdowns.
Declining supply
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By GlobalDataRussian natural gas supplies to Europe have been reduced by around 75%, year-on-year. The percentage of Russian gas in Europe’s energy imports has fallen from 45% in April 2021 to 31% in April 2022. The share of pipeline gas fell from 40% last year to 26% this year.
Tengizchevroil, which represents Chevron and Exxon in Kazakhstan’s massive Tengiz project, stated that it was aware of the temporary maintenance at CPC and that its oil exports and output from the Tengiz oilfield were currently unaffected.
Due to planned maintenance, TCO’s Tengiz oilfield output will be lower in August and September.
CPC stated that it intended to replace parts on the two affected SPMs and was looking for a contractor. The consortium did not provide a timetable.
Two sources told Reuters that one SPM could handle less than 70% of standard terminal capacity, leaving Kazakhstan, which relies heavily on CPC for oil exports, facing the prospect of reducing output.
According to Simone Tagliapietra, a senior employee at think tank Bruegel, Russia will continue to intermittently interrupt the gas supply to Europe in the coming months to keep pressure on western powers in response to sanctions following the invasion of Ukraine, and send gas prices higher.
