EU Prepares For Potential Gas Crisis

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EU prepares for potential gas crisis (AP,  Feb. 3, 2012):

BRUSSELS (AP) — The European Union is bracing for another potential energy crisis in the dead of winter as Russian gas supplies to some member states have suddenly dwindled by up to 30 percent.

The European Commission put its gas coordination committee on alert Friday, but insisted the situation had not yet reached an emergency level as nations have pledged to help each other if needed and storage facilities have been upgraded.

Commission spokeswoman Marlene Holzner said Russia was going through an extremely cold spell and needed more gas to keep its citizens warm.

She said that Russia’s gas contracts “allow for certain flexibility in case they also need the gas. And that is the situation that Russia is facing at the moment.” The severe winter in Russia has seen temperatures drop to minus 35 C (minus 30 F).

Moscow has blamed Ukraine for the shortages, saying Kiev is siphoning off more than its share. Authorities in Ukraine have denied the accusation.

Ukraine’s Fuel and Energy Minister Yuri Boiko said Friday that Russia was shipping some 15 percent less gas than usual because of increased domestic consumption due to the cold weather.

“We are taking gas in strict compliance with the contract, but because it isn’t coming from Russia, of course it isn’t reaching Europe,” Boiko said, according to his office.

Similar tit-for-tat retorts were at the heart of previous crises. Twice over the past decade, disputes between Russia and Ukraine turned into European emergencies as gas supplies diminished, leaving the prospect of tens of millions of people across the continent without heat.

Ukrainian President Viktor Yanukovych didn’t directly address the accusations during an appearance at a security conference in Munich, but did say that “for many years” Ukraine has been a “reliable transit country.”

He acknowledged, however, that “instability of gas supplied in certain years to Europe has created conditions of distrust between three key partners” — Ukraine, Russia and European customers.

The EU has improved coordination within the bloc to make sure Europeans would not be held hostage in another payment dispute between Russia and Ukraine.

Holzner said the policy was paying off as gas deliveries this week slowed to Poland, Slovakia, Austria, Hungary, Bulgaria, Romania, Greece and Italy. She said that Poland was able to get some gas destined for Germany this week and that new storage facilities in countries like the Czech Republic and Slovakia were proving their value. Countries also now must have one month worth of gas supplies.

Gas deliveries were down by 30 percent in Austria on Thursday and 24 percent in Italy.

“It is not a situation of emergency yet,” Holzner said.

Supplies from Russia to France’s leading gas company GDF Suez were down 30 percent Friday, a company official said. Russia is a leading supplier to France.

Natural gas consumption in France hit a record high this week as exceptionally low temperatures hit countries around Europe. The GDF Suez official said it is tapping reserve stocks to make up the difference for now.

A Gazprom official said the Russian gas exporter was fulfilling its supply contracts, but European customers were asking for additional supplies.

“There is a difference between what they want and the contracted amounts,” Sergei Komlev, who is responsible for Gazprom’s export contracts and pricing, told journalists from Russian state news agencies.

To stave off a potential crisis, the EU alerted gas authorities, industry, consumer representatives and member states in a first step to meet the challenges ahead. A special meeting could be called in the days ahead if the situation worsens.

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