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07/12/2016

Slovakia looks for EU compensation over reduced Russian gas deliveries

Europe's East

Slovakia looks for EU compensation over reduced Russian gas deliveries

Oil pipeline, Ukraine. [Shutterstock]

Slovakia could seek compensation from the European Union on potential losses from replacing what it says is a shortfall in deliveries requested from its main supplier Russia over the past month, an economy ministry spokeswoman said on Monday.

Poland, Slovakia, Austria and Hungary have all reported that Russia’s state-controlled Gazprom has sent smaller deliveries than requested after the European Union began sending gas to Ukraine.

Slovakia, a major transit point for Russian gas through Ukraine to the EU, last week said that state importer SPP’s flows from Russia were down more than 50% on its requested deliveries.

Gazprom, meanwhile, has said that its deliveries to the central European country had been stable in the preceding 10 days and that it was meeting its contractual obligations.

Slovakia has not calculated whether it has incurred losses as a result of recent deals to secure alternative gas supplies, but the economy ministry said that European Energy Commissioner Günther Oettinger had confirmed that the country could be in line for compensation.

“The question will be raised at the nearest European Council meeting whether there is the will to compensate,” Miriam Ziakova, an economy ministry spokeswoman, said in a telephone interview.

“Commissioner Oettinger confirmed Slovakia should get compensation if it calculates its losses.”

Russia has halted gas flows to Ukraine three times in the past decade, in 2006, 2009 and since June this year.

Gas for the EU, via Ukraine, has continued to flow despite the pricing dispute between Moscow and Kiev, but analysts have said that the lower than expected deliveries across the region mark a clear warning that Russia would be prepared to retaliate this winter should Brussels impose further sanctions on Moscow over its intervention in Ukraine.

Slovak Prime Minister Robert Fico announced last week that SPP had concluded a five-year deal with E.ON Global Commodities to supply up to 2 million cubic metres of gas per day via Austria when needed.

SPP also announced a purchase of gas on the spot market in Austria, saying that deliveries would come in the fourth quarter of this year and first quarter of 2015 if needed.

Background

Last month, Poland said it was receiving 20 percent less gas than normal from Russia and a German gas operator said its supplies of Russian gas were slightly reduced.

>> Read: Moscow limits German and Polish gas flows as 'warning'

Some European officials believe Moscow could use disruptions to the gas deliveries on which Europe depends as its trump card in a confrontation over Ukraine that has already brought ties between Moscow and the West to their lowest since the Cold War.

Russian gas monopoly Gazprom issued a statement saying it was pumping gas to all destinations "according to the resources available for exports and for the continuing pumping to storage facilities in the Russian Federation".

The disruption comes as the European Union prepares to impose a new round of sanctions on Russia over its intervention in Ukraine, a step that Russian officials had warned would bring consequences for Europe.

Gazprom has halted supplies to Western-leaning Ukraine over a pricing dispute, and the "reverse flows" from neighboring EU states are crucial for keeping Ukraine's economy afloat.

Russia meets around a third of European gas demand, sending almost half of these supplies via Ukraine.