come from the teams themselves. ♪ >> you are watching al jazeera. the top stories this hour, ukraine has called an emergency meeting of top officials, after russia said it four regions following referendums where people voted overwhelmingly to join russia. u.s. president joe biden has once again called these referenda a sham. rockets hit a residential area in the ukrainian city of dnipro. at least four people have been

killed, including two children according to the local government there. the kremlin has repeatedly denied targeting residential areas. russian president vladimir putin called the leaks in the nordstream gas pipelines an act of international terrorism. sweden confirmed a fourth rupture in the pipelines which carry national gas -- natural gas to the people u.s. president biden has warned hurrican ian could be the deadliest hurricane in history. it cut power to 2.5 million homes and businesses. florida governor has been inspecting the damage. >> there were cars floating in the world of the water. some of the homes were total losses, i would say, the most significant damage i i saw was n fort myers. some of the homes were wiped out and some of it was just concrete slabs. of course there was damage to some of our infrastructure, particularly the sanibel causeway. >> the british pound reversed losses from thursday. prime minister liz truss defended her government's

economic plans that caused chaos in financial markets earlier in the week. investors had been worried about the scale of borrowing needed to find new chancellor kwasi kwarteng's tax cuts. that does it for your headlines on al jazeera. the news continues after "inside story." ♪ folly: europe and russia trade blame for leaks on the nordstream gas pipelines. nato calls it sabotage, and is one of the military was once. moscow denies involvement. could this signal the end of the biggest gaslink between russia and western europe? this is "inside story." ♪

hello and welcome to the program. i am folly bah thibault. the nord stream 1 and 2 gas pipelines in the baltic sea are in trouble, right in the middle of an energy war between russia and europe. she and denmark have reported several leaks since the start of the week. denmark's energy agency says all the gas left in the pipes should escape into the baltic sea by sunday. norway, europe's biggest gas supplier, is deploying the military to protect its oil and gas installations. nato blamed what it called acts of sabotage. nato secretary-general young starting bird promised a united response to any attack on energy infrastructure. the e.u. had the same message, some government limit russia for the damage. >> all information available so

far seems to be indicating that this has been a deliberate act, a deliberate damage which was created, deliberate disruption of the e.u. energy infrastructure. it is completely unacceptable and it will be-russia says the s that it is responsible for the leaks were predictably stupid and absurd. moscow have demanded a u.n. security council meeting on friday to discuss the damage. the kremlin spokesman appeared to lay the blame on the u.s.. guest: we see a significant increase on the profits of u.s. energy companies supplying gas to the european continent. they are very, very interested in getting those bumper profits in the future. are we interested in this? no, we are not. we have lost the transportation gas routes to europe. is a europe interested in this, in particular the locomotive of european economics, germany?

no, it's not. folly: our correspondent has more from a vessel in the boat exceed. = hundreds of millions of cubic meters of gas is now leaking into the baltic sea for days. according to experts, there is no technology that can stop it, so basically authorities are waiting for all the gas disappear from the pipes for it can actually approach the leaks and start investigation. the swedish coast guard has confirmed that they are in total , four leaks, two on the swedish side. two on the danish side. both on nord stream 1 and on nord stream 2. the leaks are so big that experts have serious doubt that these pipes could ever be used again, because when gas leaks into the pipes, seawater goes in and there is a risk of erosion that will severely damage these pipes. so far we have heard accusations from all sides, russians accusing americans, the

americans and europeans accusing russians, but until there is an investigation really happening on the site, we don't know exactly what happened during this damage. folly: now let's take a closer look at the nordstream pipeline's. nord stream 1 started operating just over a decade ago, where nordstream 2 has yet to begin. they make up the biggest gaslink between russia and western europe. last month, nordstream stopped delivering gas after the u.s. energy standoff with russia. europe accused muska of playing politics because of western sanctions over the war in ukraine, but russia blamed a turbine a defect. canada, where the repairs are carried out, said it was willing to repair the devices. the turbines were specifically excluded from sanctions in july. but pipelines still contain gas under pressure, despite not delivering fewer. on monday the leaks were detected in swedish and danish waters. ♪

let's bring in our guests now. in london, leon izbicki, in natural gas analyst at the research consultancy firm energy aspects. in bern, cornelia meyer, ceo of meyer resource. in moscow, vyacheslav mishchenko, an oil and gas expert. leon in london. let me start with you if we can. the intense speculation is swirling right now as to who is responsible for these apparent attacks on these pipelines. who, in your view, gains or benefits the most from any disruption to these pipelines? guest: well, as i said, it is still very much speculation about what exactly happened and who benefits, but when it comes to the possibility of russia being behind this, there is an obvious gain when it comes to creating more uncertainty for energy and gas markets. in particular we have seen in the last couple of days gas

prices have surged 20%. they have come down slightly today, but what this creates is more uncertainty surrounding the europe's energy security, and markets react to this, so this just puts more pressure on european policymakers over the course of the next months really to try and tackle the domestic pressure that arises from the cost-of-living crisis, driven primarily by the surge in energy prices. folly: vyacheslav in moscow, the timing is suspicious. the damage is in norway and portland, they were announcing the opening of the trans-baltic pipeline. moscow is pointing the blame in another direction. . who do you think benefits from this disruption? guest: i think there was a kind of group of parties, i would say a group of countries or economies that should think about the changing the global

energy map, definitely for russia, it is not comfortable to make the pipelines actually explored. for russia, it was actually obvious that it has been building for several decades, the routes. and of course, germany was the number one destination, it consumed 40% of russian natural gas. it's a big market for russia. the dispute was around whether to supply, on what reason, et cetera, or staff the nordstream 2, but definitely for nord stream 1, it was working and definitely, germany and the european union benefited from that. for russia, there was no reason to make this deal. that was exactly for changing the energy map. folly: ok, changing the energy map, you say. that we bring you into the

conversation, cornelia. we have seen as leon pointed out, european gas prices have stabilized. how much instability is this incident with the pipelines causing in the gas market? guest: considerable uncertainty, but it is mitigated by the fact that because russia stopped delivering gas through nordstream 1 -- nordstream 2 is under sanctions --, but because russia stopped delivering gas through nord stream 1, there is, and most analysts expect that through the winter, this will be the case. so we have this uncertainty, this volatility. but what i would really like to say, everybody loses. with this one, also the environment loses. environmental analysts say about 300,000 metric kinds of methane will be leaked, and that is not

good. that is not good for the environment. what concerns me most and foremost, i don't know who did it, is, when we are starting to play games with critical infrastructure, be it pipelines, be it nuclear power stations, whoever plays the games, it is really a dangerous game. folly: a dangerous game, a dangerous moment. leon, could this have an impact, do you think, on the pipelines ability, when they restart nord stream 1, for example, could it impact the ability to carry gas through europe this upcoming winter? guest: as cornelia pointed out, the fact is that neither nord stream 1 nor nordstream 2 has been carrying gas into the european market. nord stream 1 not since the beginning of september. nordstream 2 did not come online after the suspension of the potential commissioning in february, following the invasion of ukraine.

so what you are looking at in terms of the market fundamentals and what analysts are looking at, the market really expect any of those flows to resume. long-term, you are looking at this potentially damaging the pipelines to the extent that they can never restart. but most analysts any kind of le resumption of fluids from russia into the european market over the coming years anyways, given the political strains between those two blocks. weather has been such an increase in the blood to is because it is taking the potential for a restart away. we have seen gazprom issuing a statement on the same day as -- the day after the leaks were discovered, about the potential hold of ukrainian transit, to further tighten up european market. the market tries to cope with this by essentially pricing higher, to the extent that it incentivizes more industrials so

shut down and cut off production, and to consequently cause a reduction in demand across the european continent over the course of this winter and over the course of the next years. folly: what impact is this happening under pressure, folly: if energy exports to europe and folly: , it will be very costly for russia, isn't it? guest: yes, exactly. it is another argument that russia did not have any reason actually to stop -- even with the current circumstances when there is a dispute on whether to resume or not, the volumes. the physical ability to sand -- to sand the volumes to supply the european union was a big advantage for russia, and now it is gone. folly: in that case, why did russia stop? sorry to interrupt you, why in that case, if you say it is critical for russia, why did russia stopped delivering gas

through the nord stream 1 pipeline? guest: the logic shows that it is all about sanctions. it is sanctions. even their turbines that were sent to canada for maintenance, there were sanctions. it is one of the reasons. but again, back to the circumstances and the impact on the russian economy, of course, gazprom is an actual gas monopoly giant and it will be difficult to go through this next year. gazprom actually when he pleaded quite a big profit from the current month. it has tripled, comparable to the last year. so i think financially, when you're on, we will have a balanced situation, by then it should be calculated and assessed. folly: alright, cornelia your thoughts, what impact will this have on europe's energy resilience, and do you think this could mean a permanent closure of the nordstream project? guest: i do think it means, when

the experts seem to say that the engineers -- when the engineers seem to say that it is unrealistic to see either nord stream 1 or nordstream 2 resume carrying gas, i think we have to assume that that is the case. as our colleague in london has said, there is talk of shutting the pipelines through the ukraine. so for this winter, this will be a tough winter for europe. you see that germany, it has actually been able to top up its gas storage to 91%. but if we have a harsh winter, that is not enough, and that will be bad for the industrial base in europe. look at somebody like basf and these chemical companies, they need a lot of gas. if they have to shut in, that

means about 100 thousand people will be furloughed, and subcontractors as well. also, we will see less investment. a lot of investors, industrial investors tell me, if europe cannot set out its energy situation, why would not -- if europe can't sort out its energy situation, why would they invest here? folly: leon, obviously they are trying to develop alternative energy supplies now, can they secure their energy infrastructure? guest: what you are looking at fundamentally for europe is a situation in which the market price is already at such high levels that you are pretty much maximizing supply from every potential source already, you are looking at maximum output from algeria, given the price incentive. you are looking at maximum production from norway. more specifically when it comes

to the global picture and global lng, you are looking at europe pricing so high that you are essentially causing demand reductions in other parts of the globe. so for example in south asia or bangladesh or india, they are taking less lng, simply because those countries are not able to afford paying more cargoes on the spot market beyond what they have been terms of their long-term contractual obligations. so this leaves the european market in a situation in which the only remaining lever it can actually clear is through a reduction in domestic demand. that is exactly what we are seeing where we are pricing above the traditional balancing mechanism for the european market. in the power sector we are pricing significantly above that to curb the demand reductions from industry and from the retailto so far, that seems to have worked. it was also aided by milder temperatures over the course of this year, but we have seen very

significant demand reductions in the industry across europe. around 16% year-to-date. that has helped us to gain the storage level that we are on track for now at around 93 billion cubic meters in storage. but again, it is a very tightly balanced market, and if you are going to see any further outages, any further supply outages, that means that prices need to raise even further to cause more demand reduction. folly: alright, let's take a look at russia's options now as a europe tries to reduce its reliance on russian oil and gas. moscow has been courting other markets. the center for research and energy and clean air found china became the biggest buyer of russian fossil fuels within the first 100 days of russia's invasion of ukraine. indian imports jumped 18%, although russian gas imports to the e.u. fell by 23%. germany, italy and the netherlands remained the biggest buyers. cornelia, your thoughts about russia and the other options it has. guest: we have to be very

careful in dividing between oil and gas, you are absolutely right. russia has rerouted its oil to india and china, and we will now see more gcc oil coming up to europe. but when it comes to gas, there is one gas pipeline to china, there are some very large fields in eastern siberia which could still go to china, but the infrastructure for pipeline gas from the western siberian fields since the 1970's, it really goes westward. you cannot just put that through the whole continent. russia is a huge country, spanning 11 time zones. you can't just put that through there. there is the potential for companies like novatek which can do lng, but then there are the sanctions which might harm that potential. so oil is fungible.

oil will find a market. gas, in many ways, not so much, unless it is lng. you have to have the market and then find the gas. folly: so it is very complicated. alternative buyers for russian oil and gas include china and india. but is that enough in terms of the revenue moscow needs to power its economy and continue the war? guest: yeah. actually, we are not talking about just the financial side, we are talking about, as i mentioned, the changing of the energy map. for russia it is not just growing experts, but actually doing so-called gas fol-sificatn on other markets. a large part of russia, there are no pipelines and distribution networks. that is the way that the government and gazprom go. they are trying to get to the

new customers actually in the western side. the western side is much more developed than the eastern side. the other one is actually motor fuel. gas has been used as methane in the engines and just increasing the demands of that side. on the export side, you are right, china will become bigger, bigger and bigger consumer of russian natural gas because of the pipeline constructions. there is just in siberia, one. there is agreements with china to build two going through mongolian territory. and the third one, i would say, is from another group of islands. the projects will become more feasible in a few years period, and india and pakistan and other countries, pakistan stream, i

would say, has become feasible just recently. it was announced pakistan will get russian gas. folly: leon, your thoughts about this. what is the outlook for russia in lining up replacement buyers for its natural gas production beyond this winter, and can china and india absorb all of this capacity question mark guest: i think my fellow panelists covered that, when it comes to cornelia saying that the majority of that infrastructure when it comes to the giant western siberian gas fields, is pointing towards europe. that is not the -- divertible supply, which means it is also reflected in the actual production declines that gazprom has been publishing up until now. those overlap relatively well with the export of the claims have seen enter the european

market, especially if you take into consideration the potential offset from the increase in production in eastern siberia, which are connected into the power of siberia pipeline and into the chinese market. in the short-term and medium-term, the main source of potential supplier to the chinese market is the power of siberia pipeline, which is probably 38 billion cubic meters a year. there is an agreement to construct power of siberia 2, but that will take at least until 2028 if everything goes all right. in the medium-term, there is a significant potential for just a deadweight loss of supply into the global balance because there is no divertibility of gas flows. that is beyond the significant tightening of the global -- market and the spikes in global gas prices more generally. folly: ok, a significant

tightening of the global gas market. leon talked about export declines. you think russia's days as an energy superpower are over? guest: not necessarily. sometimes, yes, it may take until 2027 to get the second pipeline belt, but it can also be faster from that when i see how fast biplanes got between central asia and china, quite fast. you still have oil, and russia will still be a player in oil. but america will become a lot larger player. there is a lot of land lng production -- planned lng production in america which is not permitted yet. if we bring forward the permitting of that, we can see quickly, quite large lng supplies. when i say very quickly, it could still take five years, but in terms of building lng trains and getting that going, that is quite quickly.

folly: via schussler in moscow, i will give you the last word. where do you see this heading -- for new york talked about america becoming a big player soon. where will that leave moscow and its ambitions? guest: it is all about, as i started, it is about the map, that is the core issue actually. yes, american volumes with lng will come more to the european trans-atlantic routes, and european customers will buy more and more american guests actually by resuming their lng plans. but russian volumes will be diverted to eastern and southern destinations, as i mentioned. and on top of that, as i mentioned, russia will develop the domestic infrastructure to consume more and more gas volumes. folly: so you don't think russia's days as an energy superpower under threat? guest: it's not about that.

it is about just changing the energy map, as i mentioned. nobody killed, in terms of a superpower. but russia is thinking about just diversifying the energy industry as it is, not just about keeping this number one or number two position. there is nobody talking about that. folly: ok. thank you very much for a very interesting conversation to all three of you, leon izbicki, cornelia myers, and vyacheslav mishchenko. thank you very much. and thank you for watching this program. and you can watch it again anytime by visiting our website at aljazeera.com. for further discussion, go to our facebook page at facebook.com/ajinsidestory. you can, of course, also join the conversation on twitter. our handle is at @ajinsidestory. for me, folly bah thibault, and the whole team here in doha, thanks for watching. bye for now. ♪

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