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German insurers renew cover for blast-damaged Nord Stream gas link

Nord Stream

(Reuters) — German insurers Allianz and Munich Re have renewed cover for the damaged Russia-controlled Nord Stream 1 gas pipeline, five sources with knowledge of the matter said, indicating that its revival has not been ruled out after an alleged sabotage attack.

Insurance by two of Germany's biggest companies is critical for any long-term future of the pipeline, which was the main route for Russian gas to Europe for a decade before the blast last September.

The insurance stands in contrast to Germany's public stance of severing ties with Moscow, but one of the five sources said the German government had not opposed the cover. Most Western investors have written off their stakes in the pipeline.

Munich Re, Allianz and Germany's chancellery declined to comment, while the economy ministry said insurance was not part of the support the government had in the past provided for the pipeline.

Russia has a 51% stake in Nord Stream 1 through a subsidiary of state-owned energy group Gazprom. 

Some of Nord Stream's German shareholders favor at least preserving the damaged pipeline in case relations with Moscow improve, two people familiar with the matter said separately.

One of the people said that Berlin tolerated such an approach to the infrastructure, even though it has said that energy ties with Russia are severed.

All of the insurance industry and trade sources declined to be named because of the sensitivity of the issue.

The insurance policy covers damage to the pipeline and business interruption issues, one of the sources said.

Having insurance would also facilitate any repair work needed to resume gas supplies under the Baltic Sea to Europe.

While the import of Russian crude oil and oil products is banned under European Union sanctions, Russian gas imports are allowed. The West, however, is trying to find alternatives.

Europe's imports of Russian gas have fallen from around 40% of EU gas supply to less than 10% since Russia's invasion of Ukraine began in February last year.