What would happen if the flow of gas from Russia was completely stopped?
In my opinion, it would be better to approach the regulatory stages in terms of caution. Reduce deliveries in advance, first and foremost to customers who have the option to switch to another fuel, so that vulnerable customers such as households will last even longer. Should there be a supply disruption, I would recommend not hesitating and proceeding with regulatory steps.
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What would that mean for the residents?
In terms of disconnecting supplies, they would get to them only in the end. They should last the heating season. Fortunately, the filling of European storage tanks already corresponds to the value for which they were filled before the last heating season. Households would therefore survive if industrial customers were cut off in time.
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We are a highly industrialized country, how would restricting the supply of gas to companies affect the economy and, indirectly, the people?
Households would be indirectly affected, as hundreds of manufacturing companies would gradually have to close down. A cascading effect would follow, as the production of some companies is dependent on the products of some companies. This would also lead to the closure of factories that are not directly dependent on natural gas consumption. This would lead to a diligent search for substitutes, necessarily at higher prices. Other companies would find themselves in the face of sharply increased costs and would be in danger of being uncompetitive. The effect would be truly far-reaching.
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According to Wood Mackenzie, if supplies were stopped, gas in Europe would run out in January. What then?
A war economy would come. All energy sources that can be put into operation would be mobilized.
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How serious is the situation now?
Gazprom has reduced deliveries to Germany via Nord Stream 1 to 40 percent, and Slovakia is also to receive only half. These are already such significant supply reduction volumes that it cannot simply be replaced by other suppliers. The Norwegians are now undergoing a stage of maintenance and repairs and their supply capacity is reduced. In terms of liquefied LNG supplies, although Germany is working on new terminals, this is not a case at all that could replace the outage via Nord Stream 1.
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An increase in deliveries to terminals in Belgium or the Netherlands can be organized as a matter of urgency, but I doubt that even in this case, the ability to react to a Russian gas outage would be so quick. In addition, the LNG market is also a problem, as one of the largest terminals in the US, Freeport, has been hit by fire and will be out of service until September. Thus, the expected increase in US LNG exports to Europe is also threatened.
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So how can this be solved?
Reducing Russian gas supplies can be addressed in two ways. Either by limiting the injection into the underground reservoirs, and I assume that this is unfortunately an alternative that both Germany and Slovakia will have to accept, or by drawing from the reservoirs.
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If the supplies were completely shut down, there would be no choice but to draw from the underground storage facilities. But that would interrupt the preparation for winter.
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Fortunately, a connecting gas pipeline with Poland is already ready in Slovakia, but it is not yet in operation. Slovaks have also tried delivery from the Croatian port on the island of Krk. A small test van also reached the Czech Republic. There could also be some increase in supply, but certainly not in such volumes as to offset the sharp reduction in Russian gas supply.
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After a sharp rise in the first half of the week to 146 euros per megawatt-hour, the price of gas fell to 125 euros during the day yesterday. How do you explain that?
It may be a correction of the initial panic, when a sharp jump is followed by a decline. But it is definitely not a return to previous values. In recent weeks, gas prices have fallen to € 80 per megawatt-hour.
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We are still very high, but it is hoped that this is being abused by Gazprom to show some muscle pressure. The prevailing belief is that a complete cessation of supplies will not apply.
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