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BIGGEST EVER FALL IN GAS SUPPLIES

Russia turns off gas for Slovakia

MOST of central and eastern Europe has entered 2009 with a major gas-supply headache. Russia has cut the flow of natural gas to most of its European customers to a minimum, and on January 7 the flow to Slovakia stopped completely.

MOST of central and eastern Europe has entered 2009 with a major gas-supply headache. Russia has cut the flow of natural gas to most of its European customers to a minimum, and on January 7 the flow to Slovakia stopped completely.

“Overnight, all the supplies of gas [into] Slovakia have been halted,” a spokesman for Slovakia’s major gas utility, Slovenský Plynárenský Priemysel (SPP), Ľubomír Tuchscher, announced in an official statement on January 7.

However, households were still being supplied without restriction, Tuchscher said, adding that a similar situation had emerged in neighbouring counries and that SPP has been dealing intensively with the situation.

On January 6, the company declared a state of emergency after supplies fell by 70 percent.

The gas crisis paralysing Europe is a result of a conflict between Russia and Ukraine, ostensibly over missed payments for gas imports by Ukraine. Russia cut off the gas it supplies to Ukraine on January 1 in the dispute, which also concerns the size of the debt and future pricing levels. All of Slovakia’s gas imports come from Russia, via Ukraine.

Meanwhile, the European Commission demanded the immediate restoration of gas supplies to Europe and for the two parties, Russia and Ukraine, to resume negotiations over their bilateral commercial dispute. EU gets about a fifth of its gas from Russia via pipelines through Ukraine.

“Without prior warning and in clear contradiction of the reassurances given by the highest Russian and Ukrainian authorities to the European Union, gas supplies to some EU member States have been substantially cut,” the European Commission said in an official release. “This is completely unacceptable.”

On January 6, representatives from Eurogas, the European organisation of natural gas industries, met European Energy Commissioner Andris Piebalgs and urged both Russia and Ukraine to respect their contractual supply and transit obligations.

“Both parties should be aware of the negative impact and the damage this dispute might generate,” the EC said. “It is necessary to reach not only a solution to this immediate problem but to arrive at a sound common agreement for the longer term to avoid the risk of future disputes.”

Critical situation

SPP on January 6 warned its large customers that their supplies might be limited, and on January 7 announced limits for industrial consumers. Companies with annual consumption exceeding 60,000 cubic metres now have to cut their gas use to what the gas distributor calls the minimum safe level.

Slovak households have not yet had their gas supplies limited, and hospitals and schools have not yet been affected either. However, the populations of some countries which do not hold significant reserves, such as Bulgaria, have already felt the direct effect of the Russian-Ukrainian gas dispute through a fall in the supply of gas for household heating.

SPP said it was operating in emergency mode.

“We are facing the biggest fall in gas supplies in our history,” said the chairman of SPP’s board of directors, Bernd Wagner, at a special press conference on January 6.

According to Wagner, the SPP can deal with the critical situation thanks to its access to gas reserves.

Economy Minister Ľubomír Jahnátek announced that Slovakia’s normal estimated consumption at current temperatures is 30 million cubic metres of gas per day.

“We're able to pump a maximum of 22 million cubic metres per day from the reserve depots, but not indefinitely,” Jahnátek said, as quoted by the SITA newswire.

"It is an unprecedented situation," said Jahnátek.

He suggested that the shortfall in natural gas supplies could be the result of Russian and Ukrainian efforts to combat temperatures that have dropped to minus 20-30 degrees Celsius in those countries, Jahnátek added.

Shipments of Russian natural gas to Europe through Ukraine dropped significantly on Tuesday.

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