Russia's Gazprom tightens squeeze on gas flow to Europe

This content was produced in Russia, where the law restricts coverage of Russian military operations in Ukraine.

MOSCOW, July 25  - Russia tightened its gas squeeze on Europe on Monday as Gazprom (GAZP.MM) said supplies through the Nord Stream 1 pipeline to Germany would drop to just 20% of capacity.

Gazprom said flows would fall to 33 million cubic metres per day from 0400 GMT on Wednesday - a halving of the current, already reduced level - because it needed to halt the operation of a Siemens gas turbine at a compressor station on instructions from an industry watchdog.

Germany said it saw no technical reason for the latest reduction, which comes as Russia and the West exchange economic blows in response to what Moscow calls its special military operation in Ukraine.

The Dutch front-month gas contract, the European benchmark, closed 9.95% higher on news of the latest blow to Nord Stream 1. The pipeline, which has a capacity of 55 billion cubic metres a year, is the single biggest Russian gas link to Europe

The European Union has repeatedly accused Russia of resorting to energy blackmail, while the Kremlin says the shortfalls have been caused by maintenance issues and the effect of Western sanctions.

Politicians in Europe have said Russia could cut off gas flows this winter, which would thrust Germany into recession and lead to soaring prices for consumers already grappling with higher prices for food and energy.

Siemens Energy said the transport of the serviced turbine to Russia could start immediately, and the ball was in Gazprom's court.

"The German authorities provided Siemens Energy with all the necessary documents for the export of the turbine to Russia at the beginning of last week. Gazprom is aware of this," it said.

"What is missing, however, are the customs documents for import to Russia. Gazprom, as the customer, is required to provide those."