Gas prices up 8pc after three leaks in Nord Stream pipelines in one day
Gas prices jumped amid concerns over security of supply after leaks were found in key pipelines linking Russia to Europe, raising sabotage fears.
Prices in Europe climbed 7pc from €176 per MWh to €188 per MWh while prices in Britain climbed 3pc to 258p per therm.
Three leaks have been found in the Nord Stream 1 and 2 pipelines running under the Baltic Sea between Russia and Germany, near to Sweden and Denmark.
Neither pipeline is currently pumping gas to Europe but the leaks will dent any remaining hope that some flows could be resumed through the Nord Stream 1 before winter.
They also raise concerns about escalation in the energy war between Russia and Europe since Russia’s invasion of Ukraine.
Russian sabotage is feared after Nord Stream described the damage in a single day as “unprecedented”.
“There are some indications that it is deliberate damage,” a European security source told Reuters, stressing it was too early to draw conclusions. "You have to ask: Who would profit?”
Kremlin spokesman Dmitry Peskov said the situation was “unprecedented” and required investigation.
Asked whether sabotage could be involved, he said it was premature to speculate, but added: “Nothing can be ruled out until there are results from the investigation”.
The jump in gas prices follows months of soaring wholesale prices due to cuts in Russian supplies, forcing Governments across Europe and the UK to step in and shoulder energy costs for households and businesses.
The UK government is spending an estimated £60bn on support set to last for six months from October.
Gazprom, Russia's state gas giant, on Tuesday claimed high gas prices had helped earnings more than double to three trillion roubles (£48bn), despite efforts in Europe to switch to other suppliers. It said its average gas export price had climbed 3.5 times.
The leaks on Nord Stream pipelines comes as a new pipeline is set to open on October 1 between Norway and Poland, reducing Russia’s leverage in the market.
The Baltic Pipe will allow Poland to import up to ten billion cubic metres of gas every year.
Speaking at the inauguration of the pipeline on Tuesday, Kadri Simon, the EU’s energy commissioner, said it would play a “valuable role in mitigating the energy crisis.”
Gas supplies via the two pipelines have been at the centre of tensions between Russia and Europe over Russia’s invasion of Ukraine.
Germany pulled the plug on the new Nord Stream 2 pipeline in February just as it was about to come into use, while Russia has stopped sending gas through Nord Stream 1.
Although neither are in operation, they still contain gas under pressure. A fall in gas pressure on Nord Stream 1 on Monday alerted authorities to the problem.
Ships have been cautioned to stay away from the pipes amid concerns vessels could lose buoyancy or there could be an explosion.
Jakub Godzimirski, a research professor at the Norwegian Institute of Foreign Affairs who specializes in Russian energy policy, said the leaks could be due to technical problems but sabotage was possible.
