Luxembourgh Times

Nord Stream damage was deliberate, says EU

Damage to two gas pipelines from Russia was caused deliberately, says bloc's foreign policy chief Josep Borrell

The gas leak at the Nord Stream 2 gas pipeline off the Danish Baltic island of Bornholm, south of Dueodde.

The gas leak at the Nord Stream 2 gas pipeline off the Danish Baltic island of Bornholm, south of Dueodde. © Photo credit: AFP

Source: Bloomberg

Severe damage to two gas pipelines from Russia was “deliberate,” and the European Union will take more steps to bolster its energy security, the bloc’s foreign policy chief Josep Borrell said.

Polish Prime Minister Mateusz Morawiecki blamed Russia for what he called a probable “act of sabotage”. The attacks mean that critical infrastructure in Europe is now a target, according to German economy minister Robert Habeck.

Gas prices jumped on supply concerns, after Gazprom PJSC warned late on Tuesday that flows via Ukraine are also at risk. All eyes are now on European governments’ response, and traders are watching gas flow data from Ukraine.

A cap on the price of natural gas should be applied to all transactions, and not limited to imports from specific jurisdictions, 15 EU Energy Ministers said in a letter to the European Commission.

The cap is a priority and can be combined with proposals to strengthen the financial oversight of the gas market and develop alternative benchmarks for gas pricing in Europe, energy ministers of Belgium, Bulgaria, Croatia, France, Greece, Italy, Latvia, Lithuania, Malta, Poland, Portugal, Romania, Slovakia, Slovenia and Spain said in the letter.

The European Union’s executive arm plans to discuss the feasibility of imposing a price cap on gas in a document to be presented to member states on Wednesday.

Ukraine’s NJSC Naftogaz Ukrainy intends to continue with arbitration against Gazprom PJSC, its chief executive officer said on Twitter. The legal dispute could lead to Russia sanctioning the country and cutting supplies of gas.

Natural gas prices in Europe jumped 11%, after Russia’s Gazprom warned supplies via Ukraine are at risk if the country pursues a dispute over transit payments. The warning came after leaks were reported on Nord Stream pipelines to Germany, which authorities suspect are caused by sabotage.

President of the European Commission, Ursula von der Leyen warned that Europe will carry out “the strongest possible response” if the damage on the Nord Stream 1 and 2 pipelines proves to be deliberate. She said any deliberate damage to Europe’s energy infrastructure is “unacceptable.”

©2022 Bloomberg L.P.