The Russian operator of a pipeline that supplies Turkey and the Balkans with natural gas said it would suspend some maintenance and repair work, citing European Union sanctions, a move that threatens to deepen Europe’s energy crisis.
Oleg Aksyutin , the director of South Stream Transport B.V., sent a note earlier this month to division managers informing them that Netherland’s import and export authority would be revoking its export license as of September 17.
South Stream Transport is the Dutch-unit of the Kremlin-controlled natural gas giant, Gazprom, which manages the TurkStream pipeline running under the Black Sea from Russia to Turkey and on to the Balkans and Central Europe.
In the letter, a copy of which was obtained by RFE/RL, Aksyutin ordered them to “suspend the execution of all contracts related to the technical support of the gas pipeline, including design, manufacture, assembly, testing, repair, maintenance and training.”
He said gas exports should continue but only with emergency support in order to prevent damage to the environment.
Deyan Kalaydzhiyev, the head of contracts, told employees in a letter that was also obtained by RFE/RL to inform Western suppliers of goods and services -- such as control valves, technical support, telecommunications for pipeline maintenance, and pipeline repair – that purchase agreements were to be suspended as of September 16.
South Stream Transport has applied for a new license but it doesn’t know if it will receive it, a company source told RFE/RL.
Dutch and Turkish officials did not immediately reply to a request for comment.
TurkStream has the capacity to deliver 31.5 billion cubic meters (bcm) of natural gas a year with half of it destined for Turkey and the other half for the Balkans and Central Europe.
Serbia and Hungary are the main European consumers.
TurkStream lies three kilometers below the sea in waters with high seismic activity. Specialized ships regularly monitor the pipeline for damage in order to quickly make repairs. The equipment needed to monitor and repair the pipeline is largely imported from the West.
South Stream Transport’s suspension of contracts means that “no one will be able to carry out repairs if a pipe is damaged, gas leaks, or if a part of the pipeline comes apart due to an earthquake. In fact, the company has lost operational control over the pipeline, the Russian branch has lost contact with the corporate center," a company source told RFE/RL.
Russia earlier this year slashed exports through Nord Stream 1, its main natural gas export pipeline to Europe, claiming Western sanctions on equipment and services impaired its ability to maintain the underwater pipeline in the Baltic Sea.
The move drove EU gas prices to record highs. Last month, Russia completely cut exports along Nord Stream 1, citing continued maintenance issues.
Western leaders accused Russia of using the sanctions as an excuse to cut natural gas exports to Europe in an attempt to inflict severe economic pain on the bloc , weaken EU support for Ukraine, and reverse sanctions.
The EU last year received 40 percent of its natural gas needs from Russia, giving the Kremlin massive influence over the bloc’s energy industry, including the ability to manipulate prices.
In imposing sanctions on Russia for its invasion of Ukraine, the EU made carve outs for the gas industry to ensure continued deliveries.
Benjamin Schmitt, a research associate at the Harvard-Smithsonian Center for Astrophysics and senior fellow at the Center for European Policy Analysis, said Europe needs to brace for Russia replicating in the Black Sea the strategy it used to halt exports along the Baltic Sea.
"For months, Gazprom has been citing false technical and sanctions claims to justify its significant gas cuts and resultant energy weaponization along the Nord Stream pipeline routes against the EU,” said Schmitt, a former European energy security advisor at the State Department.
“Continuing that same playbook along the TurkStream pipeline route is something the European Union must be prepared for, and the arguments that Gazprom is making for potential cuts along this Black Sea line is consistent with this very approach that has been taken by the Kremlin for months," he said.
Earlier this week, explosions damaged the Nord Stream 1 and Nord Stream 2 pipelines, meaning they will be out of operation indefinitely.
The EU and NATO called it “sabotage” with some EU officials accusing Russia of being behind the attack. The Kremlin has denied any involvement and pointed the finger at the United States, an accusation that Washington immediately dismissed.
Russia now has only two out of five natural gas export pipelines to Europe in operation, including TurkStream and one running through Ukraine.
A cut in flows or a complete shutdown of TurkStream would especially hurt Hungary, one of the EU countries most dependent on Russian gas imports.
Hungary’s Prime Minister Viktor Orban has been the most vocal opponent of EU sanctions on Russia, undermining the bloc’s united front against the Kremlin.
His government earlier this month called for holding a non-binding, popular vote to determine if Hungarians want the EU to end sanctions on Russia.
Russia’s halt to maintenance and repairs on TurkStream comes just as Europe rushes to fill its natural gas storage ahead of the winter heating season.
Natural gas is used to heat homes and buildings throughout Europe with demand surging during the winter. It is also used to fire power plants to generate electricity.
Europe could suffer from rolling blackouts this winter if it is unable to secure enough gas, experts say.
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Western leaders accused Russia of using the sanctions as an excuse to cut natural gas exports to Europe in an attempt to inflict severe economic pain on the EU, weaken its support for Ukraine, and reverse sanctions.
If this is the case, then there is a simple test to prove President Putin wrong: a lifting of the sanctions to see if Russian gas supplies via Nord Stream 1 and Turk Stream return to normal within a reasonable period. If not then sanctions could be re-imposed.
Dr Mamdouh G Salameh
International Oil Economist
Global Energy Expert