Gas jitters hit Europe

2006-01-02 19:16

London - Europe felt the squeeze on its gas supplies on Monday amid the Russia-Ukraine price row, as even European Union heavyweights Berlin and Paris contemplated the shivering prospect of an imminent mid-winter supply crisis.

Twenty-four hours after Russia cut its gas supply to Ukraine in a politically charged dispute over pricing, central European nations were the first to feel the chill.

European Union economic kingpins France and Germany announced drops in their Russian gas supply as well, while Britain alone played down concern, touting its relative independence from the world's largest gas producer.

Gas experts from the three states were prepared to review the crisis at a special meeting on Wednesday in Brussels.

Ukraine denies allegations

Gazprom, the state-controlled energy group and top world producer, accused Ukraine on Monday of pilfering close to 100 million cubic metres of Russian gas bound for Europe with a market value of $25m.

Ukraine denied the allegation, but warned that it might be forced to siphon gas if temperatures plunged below freezing.

Europe imported a quarter of the natural gas it consumed from Russia and 90% of those imports were delivered via Ukraine.

Austria, which took over the rotating European Union presidency on New Year's Day, and which got nearly 60% of its gas from Russia, saw its supply of Russian natural gas via Ukraine drop by about one-third.

Gas pressure

Austrian energy group, OMV, said: "Overnight the reduction in Russian gas imports increased significantly", adding that it could cope so long as there was no big drop in temperatures - and none was foreseen in the coming days.

Neighbouring Hungary's Mol energy group reported a 40% drop in gas pressure at the border with Ukraine on Monday, after a 25% fall on Sunday.

The situation was worrying enough for economic affairs minister Janos Koka to ring up Gazprom in Moscow, asking for normal flows to resume.

Slovakia and Croatia also reported less Russian gas entering their domestic networks, but like Poland - the biggest of the new EU member states in central Europe - they expected to be able to cope for the time being.

Natural gas

In the richer EU nations to the west, the pinch began to be felt, first in Italy, which saw Russian supplies plummet by 24%, and then in France, which announced a 25-30% dip in natural gas from Russia.

Jean-Francois Cirelli, chairman of French gas giant Gaz de France, said: "Despite anticipatory measures taken by the group to face up to the situation, we are concerned about the prospect of a continued reduction in contractual gas supplies from Russia.

"We hope that this fall in supply will be temporary since it is occurring in the heart of winter."

France, which relied on Russia for 21% of its natural gas, called on Russia and Ukraine to return to the negotiating table.

- AFP