Manufacturers brace for Nord Stream repairs, fearing pipeline won’t reopen

The Kremlin says it plans to continue supplying gas through the pipeline after maintenance is completed Any disruption is the fault of Western sanctions It says delivery of turbines for a pipeline being repaired in Canada has been blocked. However, European capitals say Moscow is wielding its gas supply as a weapon, slashing deliveries of the pipeline last month in retaliation for Ukraine’s support.

Canada said on Saturday it would send the turbine to Germany after weeks of talks with the German government. Berlin wants to return it to Russia, saying the move would show Moscow is using turbines under the pretext of a political decision to cut gas distribution in Europe.

Europe has enough gas for now, but producers in the region prepare for a winter without Russian supplies. Some, who need the chemicals for production made from natural gas, are looking to import them from regions outside Europe where the fuel is more plentiful. Others plan to switch from natural gas to other fuels where they can. And some manufacturers fear they will have no choice but to discontinue altogether.

“If we get into cuts, there is no easy solution,” said chief executive Sven Torre Holsthr.

Yara International as

A is the world’s largest producer of fertilizers.

When consumption peaked, Europe was relying on Russian gas to stock up for the winter. Russian without childbirth, Officials fear shortages may appear As the temperature drops. Since Russia invaded Ukraine in February, Europe Record volume purchases of liquefied natural gas from the US and other non-Russian exporters, but those deliveries may not be enough to replace Russian gas, which last year accounted for 40% of the EU’s total supply of fuel.

Russian President Vladimir Putin on Friday warned the West against taking further measures against Moscow.

“The sanctions sanctions against Russia do more harm to the countries that enforce them,” Mr Putin told a government meeting. “Further use of the sanctions policy could lead to more serious, even disastrous consequences for the global energy market.”

Uniper

SE, one of Europe’s largest utilities, requested on Friday A bailout from the German government After being badly hit by the dwindling gas supply from Russia. Unipar, Germany’s biggest importer of Russian gas, has had to differentiate in the spot market, paying higher prices for that gas. Meanwhile, France moving towards nationalization energy giant

EDF SA,

Which is losing billions of euros under the cap imposed by the government on electricity prices.

The continent’s energy-intensive industries are discussing with governments whether they can reduce gas consumptionTo reserve scarce supplies for homes when winter arrives.

Yara, which has 15 production sites across Europe, uses natural gas to produce ammonia, the key ingredient for nitrogen fertilizer. Yara was moving its ammonia operations to near full production in the first week of July, but Mr. Holsther said the company could try and import ammonia from its other sites in markets around the world where natural gas is more abundant. . The company has taken this step several times in the past year when it faced spikes in natural gas prices in Europe. There are limits to the company’s flexibility, Holsther said.

“Ammonia-producing assets aren’t really designed to ramp up and down with price fluctuations,” he said.

German manufacturers, the motor of European industry, are rushing to prepare for a possible Russian cutoff.

hamburg based

aurubis AG

One of Europe’s largest copper producers said it was exploring gas alternatives with electricity and oil. Gas, however, remains the major fuel for many of its processes and cannot be replaced in the short term, including some work at its Hamburg smelter where more than 2,000 workers produce wires, cathodes and precious metals.

Switching to alternative energy sources is further complicated by global supply-chain disruptions. Orubis estimates that this change could take up to a year.

The German company Ritzhof AG operates in one of the most energy-intensive industries in the world: glass making. Most of the energy consumed in the manufacture of glass comes from the natural-gas combustion used to melt the raw materials and to heat furnaces to produce the glass. Axel Drosser, chief executive officer, describes the gas as a “glass soup” boiling in tanks over 2,700 degrees Fahrenheit.

“Natural gas cannot be substituted here. If there is no gas, the oven has to be turned off and production comes to a standstill,” he said. can go.

Mr Drosser said the company, which sells its goods in more than 100 countries, is trying to reduce its gas consumption by using some hydrogen. “However, with the given infrastructure ad-hoc replacement of gas in glass production is not possible,” he said.

Seeing a winter without Russian gas, Ritzenhof has developed two scenarios: a “holding operation”, where production is stopped but the minimum amount of glass to preserve tanks is still kept liquid, and a full shut down.

Coatinc Company Holding GmbH, one of Germany’s more than 500-year-old family-run businesses, provides an important service to the many industries that use steel: to prevent corrosion, galvanizing, or to galvanize steel. Dip in molten zinc in a kettle. It relies on 90% gas to melt zinc.

While Coatinc has been looking to switch to electricity in the long run, it will take a few years and involve an investment of about 16 million euros, equivalent to $16.4 million.

But if the gas stops this winter, so will the company’s production. In that case, the executive manager, Paul Niederstein, expects he’ll have two weeks’ notice so that the firm can extract about 7,000 tons of liquid zinc from the kettle, cool it, and store it.

Mr Niederstein said he is currently trying to persuade the German authorities, who will decide who will get gas in terms of rationing, that his industry is important and should be given priority.

“Galvanized steel is used to build solar fields and other renewable-energy infrastructure,” he said. “We’re not making chocolate here.”

Some companies that had planned to use gas instead of oil or coal as part of a plan to reduce carbon-dioxide emissions are now holding back due to gas shortages.

Volkswagen AG

It operates two coal-fired power plants at its headquarters in Wolfsburg, Germany, which provide heat and electricity for the plant and the city. In 2018, VW said it would invest €400 million to move to gas, saving 1.5 million metric tons per year in CO2 emissions.

The shift was expected to be completed by the end of this year. But after Russia’s invasion of Ukraine and the gas-supply crisis that followed, VW CEO Herbert Diess said the company could prolong its use of coal.

write to Matthew Dalton Matthew.Dalton@wsj.com and Georgi Kanchev georgi.kantchev@wsj.com