According to Finnish President Sauli Niinistö, there is suspected sabotage as the Baltic Connector Pipeline between Finland and Estonia shuts down.
A year after explosions shut down the crucial Nord Stream 1 pipeline, a pipeline carrying natural gas between Finland and Estonia is the subject of an international investigation into a possible act of sabotage, prompting new worries about the security of Europe’s energy infrastructure.
The 95-mile-long Balticconnector pipeline, which runs beneath the Baltic Sea, has been temporarily shut down due to a suspected leak, according to Gasgrid, Finland’s gas transmission company. According to Gasgrid, reopening the pipeline will take at least five months.
The gas leak and damage to an undersea communications cable, according to Finnish President Sauli Niinistö, were probably “caused by external activity.” This week, wholesale gas prices in Europe increased by more than 20% as a result of worries that it might have been the result of an attack.
Jens Stoltenberg, Secretary General of NATO, stated on Wednesday that it was crucial to determine the type of damage and how it occurred.
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“If it is proven to be a deliberate attack on NATO critical infrastructure, then this will be of course serious, but it will also be met by a united and determined response from NATO,” Stoltenberg told reporters at a summit in Brussels.
The Balticconnector is a piece of a larger system that transports gas from Lithuania to Finland via Latvia, Estonia, and Latvia. A new liquefied natural gas (LNG) terminal on the Finnish side of the pipeline is the source of the gas that Finland has been utilizing to transport gas back to Estonia as needed since April.
Balticconnector is a connecting pipeline, not a major importer of gas into Europe. Its annual capacity of 2.6 billion cubic meters, or 0.63%, of the 415 billion cubic meters of gas supplied to the European Union and the United Kingdom in total last year, is hardly a drop in the bucket.
According to specialists speaking to CNN, neither Finland nor Estonia rely heavily on natural gas to meet their energy needs. Furthermore, Estonia is still linked to the European gas grid through Lithuania, and Finland may still obtain gas from its LNG terminal.
So why does the shutdown of the pipeline matter?
Senior research fellow at the Oxford Institute for Energy Studies Jack Sharples has a thought.
According to him, the incident is “less about disrupting European gas supply and more about raising bigger questions about the safety and security of offshore infrastructure, not just gas pipelines,” adding that the Baltic Sea’s floor is also covered in electrical and communication cables.
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An ‘alarm bell’
Gasgrid and Elering, a company based in Estonia, “noticed an unusual drop in pressure in the Balticconnector offshore gas pipeline” on Sunday morning, the company stated on Tuesday.
The business stated in a statement that “it is reasonable to suspect that the cause of the incident was damage to the offshore gas pipeline.”
The damaged gas pipeline and data cable were in the area where NORSAR, Norway’s seismology research center, “detected a probable explosion along the Finnish coast of the Baltic Sea” early on Sunday morning.
Estonia has begun a criminal investigation into the failure of the communications cable, while Finland has opened a criminal investigation into alleged sabotage at the Balticconnector, according to Estonian Prime Minister Kaja Kallas.
It makes sense that authorities and energy merchants are anxious. A few months ago, a series of explosions rocked the Nord Stream 1 and Nord Stream 2 pipelines, which were formerly the primary routes for transferring Russian gas to Europe via Germany. It was widely believed that the explosions were the result of sabotage. Who was responsible for the attacks is still a mystery.
Senior fellow at the Bruegel think tank Simone Tagliapietra referred to Sunday’s episode as “a very important alarm bell” for the EU.
“Europe cannot afford the sabotage of its pipelines and LNG infrastructure,” he told CNN. “If these kinds of acts happen on international pipelines bringing gas to Europe from Norway or Algeria, that would have significant consequences on the European gas market, the European gas prices, and therefore the economy.”
Even very minor disruptions in a constrained global gas market can frighten investors and drive up prices.
Following Gasgrid’s announcement that it has closed the Balticconnector, futures prices for the standard gas contract in Europe increased 15% on Monday.
Prices have increased by more than 20% this week as a result of the pipeline closure news and US gas company Chevron’s (CVX) declaration that some of its Australian employees will go on strike this month.
Concerns over the world’s gas supply have also been raised in light of Israel’s intensifying conflict, which was sparked by a deadly attack by Hamas militants on Israeli civilians on Saturday. Chevron announced on Monday that it has shut down a natural gas field off the coast of Israel, a location that supplied 70% of the nation’s energy requirements for power generation, citing security concerns.
At the Oxford Institute for Energy Studies, Sharples stated that “the European [gas] market remains very tight, and any news is having an impact.”