Dated July 14, the letter from the Russian state gas monopoly said it had declared force majeure on supplies starting June 14. Known as an “act of God” clause, a force majeure clause is standard in business contracts and specifies extreme circumstances that relieve a party of its legal obligations. Gazprom had no immediate comment on the move. Uniper, Germany’s biggest importer of Russian gas, was among the customers that said it had received a letter and that it formally rejected the claim as unfounded. He did not share the letter, but a trading source, who asked not to be named because of the sensitivity of the matter, said the force majeure involved supplies via the Nord Stream 1 (NS1) pipeline, a major supply route to Germany and beyond. Flows through the pipeline are zero as the link undergoes annual maintenance that began on July 11 and is due to be completed on Thursday. Europe fears Moscow could hold the pipeline in retaliation for sanctions imposed on Russia over the war in Ukraine, intensifying an energy crisis that risks pushing the region into recession. Gazprom had already reduced the pipeline’s capacity to 40% on June 14, citing the delay of a turbine under maintenance in Canada by equipment supplier Siemens Energy. Canada sent the turbine for the Nord Stream gas pipeline to Germany by plane on Sunday after repair work was completed, the Kommersant newspaper reported on Monday, citing people familiar with the situation. Provided there are no problems with logistics and customs, it will take another five to seven days for the turbine to reach Russia, the report added. Subscribe to First Edition, our free daily newsletter – every morning at 7am. BST Germany’s economy ministry said on Monday it could not provide details on the turbine’s location. But a spokesman said it was a spare that was only due to be used from September, meaning its absence could not be the real reason for the drop in gas flows ahead of the pipeline’s annual maintenance work. “This sounds like a first indication that gas supplies via NS1 may not resume after the end of the 10-day maintenance,” said Hans van Cleef, senior energy economist at ABN Amro bank. “Depending on the ’emergency’ conditions.” [Gazprom] he has in mind to declare force majeure and whether these issues are technical or more political, it could mean the next step in the escalation between Russia and Europe-Germany,” he added. Austrian oil and gas group OMV, however, said on Monday it expected deliveries of natural gas from Russia through the pipeline to resume as planned after the outage. Russian gas supplies have been flowing through major routes for several months, including those through Ukraine and Belarus, as well as through Nord Stream 1 under the Baltic Sea. The European Union, which has imposed sanctions on Moscow, aims to end its use of Russian fossil fuels by 2027, but wants supplies to continue for now as it develops alternative sources. For Moscow and Gazprom, the energy flows are a vital revenue stream when Western sanctions over Russia’s invasion of Ukraine have weighed on Russian finances. According to Russia’s finance ministry, the federal budget received 6.4 trillion rubles (£96bn) from oil and gas sales in the first half of the year. This compares with a planned 9.5 tn rubles for the whole of 2022. The grace period for payments on two of Gazprom’s international bonds expires on July 19, and if foreign creditors are not paid by then, the company will technically be in default.
