Cold snap reduces Russian gas supplies

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Russian gas export monopoly Gazprom has restricted supplies to Europe, its largest foreign market, to cover an increase in domestic demand caused by a cold snap. 

Supplies into Italy via the Austrian border have been reduced by 10% compared with normal levels, the European Commission said on Tuesday, quoting the Italian Ministry of Economic Development.

Representatives of Gazprom and its export arm were not available for comment.

The European Commission said it had enough natural gas to make up for any shortfall and was confident demand could be met.

"(EU) member states are currently able to cover the Russian missing volumes with gas from underground storage and alternative routes and suppliers," said Marlene Holzner, spokeswoman for Energy Commissioner Günther Oettinger.

"Given the surplus of gas in the European markets in the previous weeks, the Commission is confident that the market is able to allocate gas where it is most needed."

Western Europe in general is heavily dependent on Russian gas. Italy relies on imports for about 80% of its gas needs and about 30 percent of them are met by Russia.

The Italian Ministry of Economic Development told the EU Commission gas distribution network Snam Rete Gas reported a decrease of 8 million cubic metres in the gas flowing from Russia via Tarvisio on the Austrian border, adding the missing gas represented 10% of the normal daily inflow.

It said the Italian gas system was able to cover the reduction with gas from storage, which was around 65% full, and from other sources, including Norway, Algeria and liquefied natural gas.

Large parts of Russia have been hit by what weather forecasters have called "anomalous cold", with temperatures in the Moscow region falling to minus 15-22 degrees Celsius during the day and minus 22-29 degrees at night.

Temperatures are expected to remain well below normal over the next 10 days, according to the Hydromet Center's weather forecaster, with temperatures averaging minus 20 degrees in Moscow.

Gazprom's ability to meet peak demand resulting from extreme cold is constrained by the pace at which it can pump gas from its underground storage, to supplement baseload production from its Siberian fields.

Gazprom produced 510 billion cubic metres (bcm) of gas out of total Russian output of 671 bcm last year.

Relations between the EU and Russia can be tense, with Europe keen to wean itself off imported supplies and unable to forget disruptions to supply caused in the past by pricing disputes between Russia and gas transit nation Ukraine.

Following the publication of this article, Gazprom sent out the following statement:

"Despite the fact that due to cold weather, domestic gas consumption in Russia has soared, Gazprom continuously meets its obligations towards its European customers. "

"To meet its export requirements, our company is using all available gas transportation routes, along with a significant increase in the off-take from its underground gas storage facilities in Europe. In particular, the Blue Stream pipeline is operating at full capacity since mid-January, and delivery volumes through the Yamal-Europe pipeline grew by 20% since mid last week."

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