Commission plays down risk of gas running short

Squeezed supply of Russian gas to some EU countries fell further today (3 February), the European Commission said, but added the situation had not reached emergency levels despite freezing temperatures gripping much of Europe.

A cold front blamed for more than 100 deaths is lashing the continent, bolstering demand for heating and forcing countries to tap stored gas supplies.

"I can confirm that there has been a decrease in gas deliveries in various member states: Poland, Slovakia, Austria, Hungary, Bulgaria, Romania, Greece and Italy," EU energy spokeswoman Marlene Holzner told a regular news briefing.

"Yesterday, we saw in Austria a decrease of 30%, Italy of 24%, and Poland 8%. But I must also say that it's not a situation of emergency yet."

All member states had so far been able to secure gas from other sources, either from storage facilities or substituting supplies with liquefied natural gas (LNG), Holzner said.

Reduced supply of Russian gas via Ukraine has raised EU fears of a repeat of the gas crisis in 2009, when supplies to Europe were suspended for about two weeks because of political tensions between Moscow and Kiev.

On Thursday, Russian gas export monopoly Gazprom said it was sending as much gas as it could spare to Europe, and that Ukraine, whose pipelines carry Russian gas to the EU, must be taking more than its contracted share. Kiev has flatly denied doing so.

The observed decrease in Russian gas flows to Europe does not necessarily mean that Gazprom has breached its contractual obligations.

"The contract that Russia has allows for certain flexibility in case they also need the gas, and that's the situation that Russia faces at the moment. In the last days, we talked about minus 20 degrees (Celsius) in Moscow," Holzner said.

Tight supply in Southeast Europe

Supply of Russian gas to Bulgaria and that which is piped via the country to neighbouring Greece, Turkey and Macedonia has dropped by more than 30%, Kiril Temelkov, chief executive of network operator Bulgartransgaz told Reuters.

"We hope that this is temporary, but the drop in the pressure [of the gas flows] at the entrance point is significant," he said.

Bulgaria is tapping its own reserves to make up for the decreased supplies in the freezing weather, Temelkov said, noting clients were being asked to reduce gas consumption though there were no formal restrictions so far.

Italy, a major European user of Russian gas, is also not getting as much as it is asking for, with a shortfall of over 30 million cubic metres of gas on Friday, gas transmission operator Snam's data showed.

Italy has raised gas requests from Russia and Algeria, another major supplier.

In Poland, another major Russian customer, deliveries from Gazprom have returned to normal after flows were reduced on Thursday, delivery monopoly PGNiG said.

Still, PGNiG warned that deliveries could be reduced slightly again in the coming days because of further freezing temperatures.

Supplies in Britain looked stable, although the soaring demand meant that spot gas prices in Europe's most important gas market shot up to 3-year highs.

The UK relies heavily on Norwegian pipeline gas imports as well as on Qatari shipments of liquefied natural gas (LNG), and both these supply sources have been healthy.

Traders said that the main risk was if cold in Norway disrupts Norwegian gas processing plants and flows to Britain.

Weather outlook

Weather forecasters said that cold temperatures were likely into next week, although temperatures could rise slightly and some areas would see a return to milder conditions.

"There is a weak trend towards slightly milder conditions," said Lars Elgeskog, a meteorologist at Point Carbon, a Thomson Reuters company, but added temperatures were seen staying below seasonal norms.

German weather service DWD said that it expected extreme cold to continue in central and eastern Europe for the next four days, but that temperatures would rise back above freezing point in most parts of France and Britain.



A payment dispute between Russia and Ukraine over gas supply and transit left millions of East Europeans without heating in the first three weeks of 2009. 

A solution to the gas crisis was later found between Russian Prime Minister Vladimir Putin and his Ukrainian counterpart at that time Yulia Tymoshenko.

Under the present Ukraine leadership, Tymoshenko was sentenced to seven years of jail over allegations that she abused her office in relation to a gas deal signed with Russia in 2009. This development has been a setback for the EU-Ukraine relations.

Ukraine is trying to bring down the price it pays for Russian gas. On 20 December, Putin and his Ukrainian counterpart Mykola Azarov failed to achieve a breakthrough in talks in which Russia links the issue of price reduction to a stake in Ukraine's gas pipeline network.