EU says gas supplies are down despite Gazprom claim

February 03, 2012 | Commodities & Oilprice, Eastern Europe & Russia

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Russian natural-gas supplies to Europe were curtailed for a third straight day Friday as particularly cold winter weather increased Russia’s domestic demand, hitting flows to a number of European Union countries.

“There has been a decrease in gas deliveries,” Marlene Holzner, a spokeswoman for EU Energy Commissioner Guenther Oettinger told reporters. “Russia needs more gas itself, they are having an extremely cold winter.”

Ms. Holzner explained that the situation isn’t causing an emergency because all member states affected are for now able to make up for the lower Russian supply by buying the gas from neighbours, using storage capacity, or importing liquefied natural gas.

It came as the death toll from the big freeze across central and eastern Europe rose Friday to at least 169. In Ukraine alone, authorities said 101 people so far had frozen to death.

The EU Friday afternoon activated a group of industry, government and energy experts that gather in emergency cases. It has started sharing information and is monitoring the situation, Ms. Holzner explained.

She said that while exact figures for Friday aren’t yet available, Thursday’s supplies from Russia to Austria declined 30%, to Italy by 24% and to Poland by 8%. Other countries affected include Slovakia, Hungary, Bulgaria, Romania and Greece.

Any reduction in gas flows from Russia attracts strong attention in the EU, after repeated crises in recent years. In 2009, a tough dispute over price between Russia and Ukraine caused Moscow’s gas supplies to the EU countries to plunge, crippling the flow to some countries for weeks.

But an EU official explained Friday that Gazprom did give advance warning to EU companies about the possible flow reductions and said there was no reason to believe at this stage that there was any ill intent behind this week’s disruption.

Poland’s natural gas monopoly PGNiG SA said earlier Friday it expects small-scale irregularities in gas deliveries coming over Poland’s eastern border in the next few days due to the low temperatures throughout Europe, although it said supplies from Russia’s Gazprom-Export have returned to the amounts ordered.

In Italy, Russian gas flow was 29% less than requested for Friday via an entry point in the northeast of the country, according to data available on the website of Snam SpA, which runs the gas grid, as of 8 a.m. ET.Russia represents around 30% of Italy’s imports, with the rest coming mainly from Algeria, Libya, Norway, and Qatari liquefied natural gas.

Wingas—Germany’s second-largest importer of gas and a 50-50 joint venture between German chemicals giant BASF SE’s Wintershall unit and Gazprom—also said Friday that there still are reduced volumes of  Russian gas arriving, but declined to quantify them. It added however that there was no issue in terms of security of supply because the company is well diversified and has solid levels of storage.

Franco-Belgian power operator GDF Suez SA said it didn’t notice any change in supplies as of Friday.

The EU has significantly improved its capacity to respond to gas shortages since the 2009 crisis, with countries improving storage capacity and increasing interconnections to enable the movement of gas in many different directions.

EU countries are obliged to stock natural gas equivalent to 30 days of consumption. However, the EU official said there is uncertainty about whether all the region’s 27 member states are in compliance with that rule.

Russia’s gas imports account for roughly 25% of the total EU gas consumption.