Sweden and Denmark probe leaks in Nord Stream gas pipelines

Sweden and Denmark are investigating leaks in both of the Nord Stream gas pipelines that have been at the centre of the energy crisis between Russia and Europe.

Sweden’s maritime administration on Tuesday reported two leaks in Nord Stream 1’s pipelines close to the Danish island of Bornholm in the Baltic Sea, and warned ships to avoid the area. That report came hours after Denmark’s energy agency said there was a separate leak on the now defunct Nord Stream 2 pipeline, also close to Bornholm.

The leaks in both pipelines will not affect gas supply. Russia halted supplies through Nord Stream 1 this month, intensifying Europe’s energy crisis as countries rush to replace that gas from other sources before the winter.

Nord Stream, the pipelines’ Swiss-based operator that is majority owned by Gazprom, said the incidents were “unprecedented”, adding that it was carrying out an investigation into the leaks.

“Incidents on three strings of two pipelines is certainly not something that happens every day. As this is on the seabed it will take time to investigate. It’s speculative to talk about the damage or the repair duration at this point,” Nord Stream said. “Generally speaking a methane gas is not poisonous — it dissolves in the water. But the coastguards have brought in restrictions.”

Analysts suggested that, while authorities were being cautious, they would almost certainly suspect foul play.

“Given both pipelines were still pressured and have the capacity to pipe around 165mn cubic metres a day of methane-heavy fossil gas, leaks of this size pose potentially severe safety and environmental risks,” said Henning Gloystein, at Eurasia Group.

“Pipelines of this size are designed to avert accidental damage,” Gloystein added, pointing out that the lines consist of concrete-coated thick steel pipes that lie on the seabed.

Swedish and Danish authorities warned ships to keep clear of the region as they also investigate the possible causes of the leaks. The Swedish maritime administration also cautioned that aircraft should keep a “safety altitude” of 1,000 metres in the area.

A new gas pipeline link between Norway — now Europe’s biggest supplier of gas — and Poland is due to open on Tuesday.

German authorities cancelled the approval process for Nord Stream 2 just days before Russia’s full-scale invasion of Ukraine in February, but the pipeline had been filled with gas in anticipation of its start-up. The pipeline had been completed but was awaiting certification.

European politicians accused Russia of “weaponising” energy supplies as it cut flows through Nord Stream 1, before finally saying in early September it would keep it switched off after maintenance until the EU lifted sanctions against it.

That move rippled through European energy markets, causing Nordic ministers to warn of a potential Lehman Brothers moment while offering billions of euros in liquidity support to utilities. Germany also nationalised Uniper, its largest importer of gas, which struggled to replace its Russian supplies.

Ukraine has long opposed both of the Nord Stream pipelines, arguing they were designed to weaken its position as one of the main conduits for Russian gas into Europe. Russian gas has continued to flow through Ukraine even after Moscow launched its invasion.

Energy analysts said it was not clear who would stand to benefit from the leaks at a time when neither line was operational.

“To see a number of leaks happening in quick succession will clearly raise questions over how this could be a coincidence,” said Tom Marzec-Manser, at ICIS. “But the leak on Nord Stream 2 is very close to the new Baltic Pipe that will bring Norwegian gas to Poland for the first time when it opens this week, so there’s some heavy symbolism. For EU gas imports it’s a new dawn for Norway and twilight for Russia.”

James Huckstepp, at S&P Global Platts, said the price reaction was limited but cautioned it could still stoke uncertainty in the market.

“The probability of Nord Stream 1 coming back before the end of the year has essentially dropped from 1 per cent to 0 per cent,” Huckstepp said. “But there remain concerns about the remaining gas flows through Ukraine and whether they could see reductions later this year.”

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