European gas costs soar as Nord Stream shutdown looms

Spot prices exceeded $2,900 per thousand cubic meters for the first time since March 8

Natural gas prices in Europe jumped 10% on Monday following last week’s announcement from Russian energy giant Gazprom about an upcoming three-day shutdown of the Nord Stream 1 pipeline for maintenance.

The cost of September futures on the TTF hub in the Netherlands rose to €275.9 ($385.5) per megawatt hour, or around $2,905 per thousand cubic meters at 06:16 GMT, according to data from London’s Intercontinental Exchange.

It is the highest price for natural gas on the European spot market since March 8.

The price rally started late last week, after Gazprom announced that the only operational turbine on the Nord Stream 1 pipeline will be shut down for repairs starting on August 31, with gas transit through the pipeline completely suspended until September 2.

“Once the work is completed and there are no technical malfunctions of the unit, gas flows will be restored to 33 million cubic meters per day,” Gazprom said in a statement on Friday.

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The prospect of the shutdown comes as Europe attempts to fill gas storage facilities ahead of the heating season. Storages in Germany have to be filled to 95% of capacity by November 1. In late July, Germany’s gas storages were only 66.8% filled, according to the Federal Network Agency (BNetzA), and the agency said at the time that even if the flows through the Nord Stream continue at the current levels of 20% of maximum capacity, a storage level of 95% by November “is hardly achievable without additional measures.”

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