Factbox-Nord Stream’s role in Russia’s gas supply to Europe

Gazprom said on Friday that the Nord Stream 1 pipeline supplying Russian natural gas to Germany under the Baltic Sea, will be shut down from Aug. 31 to Sept. 2 as its only remaining gas compressor requires maintenance.

The closure will bring further disruption to Europe’s gas supplies with the pipeline already running at only 20% of its capacity following planned maintenance in July, a level Gazprom says will be restored once it has completed the latest work.

Below outlines the importance of the pipeline in carrying Russian gas to Europe.

Supply cut

Russia has already cut gas flows through the Nord Stream 1 pipeline to just 20% of capacity. Moscow says Western sanctions over the invasion of Ukraine are hindering equipment repairs, while Europe says this a pretext to reduce flows and use gas as a political weapon, an argument Russia rejects.

Gas from Russia covered around 40% of European needs before Russia sent troops to Ukraine in February in what it said was a “special military operation”.

Owners

Nord Stream 1 is majority-owned by Gazprom and forms the main route through which Russian gas flows to Germany.

Gazprom has 51% and the rest is held by four Western partners. PEGI/E.ON and Wintershall Dea have 15.5% each, and French Engie and Dutch Gasunie hold 9% each.

The project partners injected 30% proportionally to their shareholding in equity and received the other 70% in bank and export credit agency loans.

Operators

The Swiss-based Nord Stream AG consortium is the operating company for transit, technical, legal and environmental matters but does not own the asset or the gas in it.

Gazprom Export handles the shipments via contracts with European utilities and gas traders.

Importance

There are other major pipelines from Russia to Europe but flows through these have gradually declined.

Flows through Yamal, which historically transported gas from Russia to Europe, have been flowing eastwards, to Poland from Germany since the start of the year.

Flows through pipelines running from Russia to Europe via Ukraine have also decreased after Ukraine halted one gas transit route in May, blaming interference by occupying Russian forces.

Impact if stays shut

Without Nord Stream 1 flows, or even if they remain heavily reduced, Europe will struggle to meet peak winter gas demand.

Germany has made targeted efforts to fill up its storage facilities to prepare, with levels standing at 78.19% as of Aug. 17, slightly more than the 75.89% for the European Union.

Germany has already had to give Uniper, the country’s largest importer of Russian gas and the highest-profile corporate victim of Europe’s energy crisis so far, a 15 billion euro ($15.1 billion) bailout last month after Russia drastically cut flows, forcing it to buy gas elsewhere at much higher prices.

Soaring European gas prices are already contributing heavily to inflation and political tensions.

Companies affected

As a key pipeline for Russian gas transit, many major European gas buying companies with contracts with Gazprom saw their supplies cut after Nord Stream’s capacity was curbed to 40% before July’s maintenance. They included Uniper, Austria’s OMV, Italy’s ENI and RWE.

Russia has already cut gas flows to Bulgaria, Finland, Poland, Denmark, Dutch firm Gasterra and Shell for its German contracts, after they all rejected a Kremlin demand to switch to payments in roubles.

(Reporting by Susanna Twidale, Vera Eckerk, Tom Kaeckenhoff and Kirsten Donovan; Editing by Marguerita Choy)