German regulator urges less gas use as Nord Stream pipeline flows slump

German's energy regulator, the Bundesnetzagentur, on June 16 urged consumers to use gas sparingly after Russian deliveries via the Nord Stream pipeline slumped to 40% of capacity.

While gas supply security in Germany was currently "guaranteed", the regulator said it was monitoring the situation closely and remained in constant contact with companies in the industry.

"The Bundesnetzagentur expressly supports the request to save as much gas as possible," it said in a market update.

Russia's Gazprom said June 15 flows of gas through the Portovaya compressor station -- the start point for Nord Stream -- would be limited from June 16 to a maximum 67 million cu m/d, or 40% of the pipeline's capacity.

"Gas flows from Nord Stream were cut back [June 15] from 2300 local time to around 40% of the maximum capacity," the Bundesnetzagentur said June 16.

"At the moment we cannot confirm a causal connection between the missing gas compressor on the Russian side and the large reduction in deliveries," it said.

Gazprom said June 15 it had halted operations at one of three operational compressor units at Portovaya due to maintenance issues, having already cut back Nord Stream flows because another compressor turbine was stuck in Canada following repairs.

Any more problems with the maintenance of turbines at Portovaya could see the total suspension of flows in the Nord Stream pipeline to Germany, Vladimir Chizhov, the Russian permanent representative to the EU, said June 16.

European gas prices surged further June 16, with the TTF month-ahead price reaching almost Eur150/MWh ($156/MWh) by 1100 GMT.

The TTF front-month contract was last assessed June 15 at Eur114/MWh, down from record highs reached in March, but still 300% higher year on year, according to Platts assessments by S&P Global Commodity Insights.

The German regulator said the companies affected by the missing deliveries via Nord Stream could procure those volumes elsewhere on the market.

Early warning

On March 30, the German economy ministry declared an early warning level of the gas emergency plan in the country, giving market participants the legal right to prepare to curtail supplies to certain consumers in the event of supply disruption.

The first of three warning levels was triggered given the serious risk of disruption following Russia's invasion of Ukraine and required a crisis team to evaluate the supply situation.

A second alert level is activated when there is disruption to gas supply -- or exceptionally high demand for gas -- leading to a significant deterioration in supply.

The final state of emergency is declared when there is exceptionally high demand for gas or "significant" disruption to gas supply, with all market-based measures implemented and supply still insufficient.

In that case, non-market-based measures can be taken.

The German regulator also said June 16 that gas was still being injected into storage, albeit at reduced rates. "According to current estimates, the reason for the slight decline is probably the rise in gas prices," it said.

The major Rehden storage facility, however, was currently storing at maximum capacity, it said. Rehden -- operated by former Gazprom subsidiary Astora and now controlled by the German regulator -- was only 8.7% full.

The regulator told S&P Global last month that relatively small quantities of gas would be injected into Rehden while "intensive work" was carried out to procure larger quantities.

"The objective is to meet the storage level requirements of the Gas Storage Act, which sets out that the gas storage levels must be 80% on Oct. 1, 90% on Nov. 1, and 40% on Feb. 1 [2023]," it said.

Total storage in Germany was currently filled to some 56%, the Bundesnetzagentur said, with some sites already having stocks that were "significantly higher" than in 2015, 2017, 2018 and 2021.