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How will Nord Stream pipeline leaks affect gas bills in Denmark?

The Local Denmark
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How will Nord Stream pipeline leaks affect gas bills in Denmark?
A frame from a video released by the Swedish coast guard showing gas from the damaged Nord Stream pipeline emerging at the surface of the Baltic Sea. Gas prices increased by around 20 percent in Denmark between Tuesday and Wednesday. Photo: Den Svenske Kystvagt/Ritzau Scanpix

Gas prices increased on Wednesday morning in the wake of gas leaks from the Baltic Sea Nord Stream pipelines and Russian threats to close off remaining gas supplies to Europe.

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The stock market price of gas rose from 15 kroner per cubic metre on Tuesday morning to 18 kroner per cubic metre on Wednesday, according to energy analyst Kristian Rune Poulsen of Green Power Denmark.

“The gas leaks in the Baltic Sea have made the market nervous and prices increase by 5-10 percent in the wake of that,” Poulsen told news wire Ritzau.

“But on top of that, [Russian state gas monopoly] Gazprom has threatened to shut off supplies to Europe through Ukraine and that has made the price of gas go up even more,” he said.

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The two Nord Stream gas pipelines linking Russia and Europe were hit by unexplained leaks, Scandinavian authorities said on Tuesday, raising suspicions of sabotage.

The three gas leaks on the Nord Stream 1 and 2 pipelines were visible Tuesday in waters off Denmark with huge areas of bubbling spreading from 200 to 1,000 metres in diameter, the Danish military said.

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The leaks occurred off the Danish island of Bornholm in Danish and Swedish economic zones, but in international waters.

“The Nord Stream pipelines were already inoperative for an indefinite amount of time, so the reaction on the market has been limited,” Poulsen said.

Russia is still sending some gas to Europe – around one-fifth of pre-war levels, the analyst said.

If Gazprom follows up on its threat to shut off another pipeline – which travels through Ukraine – the remaining amount would be halved, he said.

“That would hit the sparse supplies we actually have,” he said.

Gas prices are still some way from a peak on August 26th, when the price reached 30 kroner per cubic metre.

“Since August 26th, the trend has in fact been downwards, and the price was roughly halved [compared to the August peak] up to yesterday,” Poulsen said.

Consumers who use gas to heat their homes in Denmark will nevertheless feel the impact of Wednesday’s price hike, however.

“Consumers cannot follow gas prices hour by hour like with electricity prices,” Poulsen said.

“If the price is high, their gas bills will also go up. But they will not see that until three months from now when the next heating bill comes,” he said.

The analyst said he expects gas prices to remain high at around 20 kroner per cubic metre throughout the winter, and even during the following winter.

“The next two winters look like they will be very expensive if you use gas,” he said.

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