LONDON/BRUSSELS - Squeezed supply of Russian gas to some EU countries fell further on Friday, Feb. 3,the European Union's executive 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, but added 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 from Russia via Ukraine has raised EU fears of a repeat of the 2009 gas crisis, when supplies to Europe were suspended for about two weeks because of political tensions between Moscow and Kiev.
Russian gas export monopoly Gazprom said it was sending as much gas as it could spare.
"We are doing everything possible, … all the systems are working in a stable manner," Sergey Komlev, head of contract structuring at Gazprom, told reporters on Friday.
RUSSIA BLAMES UKRAINE, KIEV DENIES
Komlev said that Ukraine, whose pipelines carry Russian gas to the EU and which has complained that Gazprom is supplying it with less this week, must be taking more than its contracted share.
"If you take a look at it and multiply, it turns out that Ukraine is talking as if it consumes 60 billion cubic metres (bcm) a year," he said.
Ukraine’s annual gas consumption is around 50 bcm, according to the U.S. Energy Information Administration.
Kiev has denied any wrongdoing.
"Naftogaz is complying fully with Gazprom’s requests on the transit of Russian natural gas to Europe through Ukraine’s territory The company states that it does not take any additional gas out of Gazprom’s transit volumes," Ukraine’s state energy firm said in a statement.
It said it was meeting higher domestic demand by tapping its own underground storage facilities.
Gazprom said it was mindful not to supply below contractual agreements.
"We generally pay fines for undersupply. If we undersupply, we pay a huge fine," Komlev said, noting the distinction which must be made between requests for extra gas and existing contracts.
"There is the agreed contract amount for a month, a day, for a monthly average. There is a maximum level, which we are obliged to ship. And the rest if we are able to supply, we supply," Komlev said.
Yet some analysts said that Russia could have done more in recent years to ensure supplies during times of high winter demand.
"Gazprom has made a strategic mistake by abandoning its gas storage expansion program for 2005-2010. Combined with the sharp reduction of imports of Turkmen gas, it has created a winter-time deficit of gas … needed in Ukraine and Europe," said Mikhail Korchemkin, executive director of consultancy East European Gas Analysis.
TIGHT SUPPLY IN SOUTHERN EUROPE
Bulgaria also faced a gap between supply and its heightened need for gas for heating.
Bulgaria’s gas consumption has spiked by about 20 percent in recent days but Gazprom has told gas wholesaler Bulgargaz it cannot ship any extra, Bulgargaz Chief Executive Dimitar Gogov said.
"We were informed by Gazprom that in the next three to four days we cannot get more gas from what we have initially agreed for," he said.
Italy, a major European user of Russian gas, was seeing shortfall of over 30 million cubic metres of gas versus what it had requested, transmission operator Snam’s data showed.
Italy has raised gas requests from Russia and Algeria, another major supplier.
Poland saw deliveries from Gazprom return to normal levels but delivery monopoly PGNiG warned there could be renewed falls in the face of further freezing temperatures.
Britain’s gas supply looked stable, though soaring demand sent spot gas prices in Europe’s most important gas market 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.
Two winters ago, however, extreme cold forced a major Norwegian gas processing plant, Kaarstoe, to shut down, helping trigger Britain to declare nationwide gas alerts.
Similar weather conditions are expected to dominate Norway in the coming days, but Norwegian offshore gas system operator Gassco said it was confident that technical upgrades since would prevent a recurrence of that.
"We feel pretty confident .. but there are never any guarantees," a Gassco spokesman said on Friday, adding: "We will keep an extra eye on equipment that is exposed to wind and ice."
Extreme cold is expected in central and eastern Europe for the next four days, while temperatures will rise back above freezing point in most parts of France and Britain, German weather service DWD said.
