Dispute hits Europe gas supplies

Exports of Russian gas to Europe via Ukraine appear to have completely stopped amid a dispute over gas supplies between the two countries.

Several countries are relying on their own limited reserves of gas

The two sides have blamed each other for halting gas flows.

Ukraine’s Naftogaz said Russia’s Gazprom halted supplies at 0744 local time (0544 GMT). Gazprom said Ukraine had closed the last remaining pipeline.

The EU depends on Russia for about a quarter of its total gas supplies, some 80% of which is pumped through Ukraine.

The list of countries that have reported a total halt of Russian supplies via Ukraine includes Romania, the Czech Republic, Slovakia, Bosnia-Hercegovina, Bulgaria, Croatia, Greece, Hungary, Macedonia, Serbia, and Austria.

Italy said it had received only 10% of its expected supply.

The row comes amid a cold snap across Europe that is likely to push up demand for gas.

Bulgaria says it has sufficient supplies for just a few more days.

Many other countries are now tapping strategic reserves, built up to cope with just such a development, says the BBC’s Europe correspondent Nick Thorpe.

Power stations have been told to switch to fuel oil where possible, while big industrial users have been told to prepare to limit or halt use.

Some 12,000 households in the eastern Bulgarian city of Varna had been left without central heating, authorities said. Nearby Dobrich was also affected.

In many former Soviet bloc countries whole towns and areas rely on a single centralised heating system, so that when that shuts down, every household is affected.

Hungary’s gas transmission company said it had limited the natural gas consumption for industrial users on Wednesday, while Budapest airport was switching from gas to oil heating, Reuters news agency reported.

Hungary expects to use 64m cubic metres of gas on Wednesday, down from 68m cubic metres, the company said.

Venting anger

Russia and Ukraine have been blaming each other for the disruption to Europe’s energy supplies.

Gazprom has accused Ukraine of shutting off the final pipeline carrying gas to Europe, but the Ukrainian gas company has said that would be impossible, since the taps are in Russia.

Correspondents say the differing versions offered by the two countries show how far apart they are, and that the row is rapidly becoming a means for venting anger caused by poor political relations.

Talks between Naftogaz and Gazprom aimed at resolving the crisis are due to resume in Moscow on Thursday – after the Christmas public holiday on Wednesday in Russia and Ukraine.

Gazprom will also discuss the matter with the EU on the same day.

The European Commission has demanded that gas supplies to the EU are immediately restored.

‘Theft increasing’

Russia stopped supplying gas to Ukraine on New Year’s Day in a row about unpaid bills and the failure to agree a new pricing contract.

On Monday, Gazprom decided to cut exports through Ukrainian pipelines by a fifth to compensate for the amount it said Ukraine was siphoning off supplies intended for Europe for its own use.

Gazprom has said Ukraine was stealing 15% of gas delivered across its borders and that theft was “increasing by the hour”.

On Wednesday Gazprom deputy chief executive Alexander Medvedev said there was no “physical possibility” of Russia bringing gas to European customers because of the shutdown of pipes going though Ukraine.

He also warned that in cold weather gas needed to flow through the pipes to keep them operational, and that failing this, “the system could not be restarted very quickly”.

Ukraine has denied stealing gas, saying technical problems are disrupting the onward flow of gas to Europe.

Ukrainian President Viktor Yushchenko said in a letter to Russian President Dmitry Medvedev and European Commission President Jose Manuel Barroso that his country had not used “a single cubic metre of Russian gas” to meet its own needs.

The new EU member states in central and eastern Europe are heavily – and in some cases entirely – dependent on Russian gas imports.

However, Germany and Italy together account for nearly half of the Russian gas consumed in the EU.

Gazprom has promised to pump extra supplies through other pipelines – the Yamal from Arctic Russia through Belarus to Germany, and the Blue Stream to Turkey under the Black Sea.

A similar row between Gazprom and Ukraine at the beginning of 2006 led to gas shortages in several EU countries.

Tags: Europe, Gas, Russia, Ukraine