Poland sees reduced Russian gas supply

Oando's 128 Km gas-pipeline11 September 2014, News Wires – Poland said it was receiving 20% less gas than normal from Russia and a German gas operator said its supplies of Russian gas were slightly reduced, reports said.

Some European officials believe Moscow could use disruptions to the gas deliveries on which Europe depends as its trump card in a confrontation over Ukraine that has already brought ties between Moscow and the West to their lowest since the Cold War.

Gazprom issued a statement saying it was pumping gas to all destinations “according to the resources available for exports and for the continuing pumping to storage facilities in the Russian Federation”.

But Gazprom did not deny the levels of supply this week to Poland – a former Communist country with which Moscow’s relations have chilled – were lower than they were previously.

The disruption comes as the EU prepares to impose a new round of sanctions on Russia over its intervention in Ukraine, a step that Russian officials had warned would bring consequences for Europe.

“This is a warning signal for the EU not to go any further with the sanctions,” said Pawel Poprawa of the Institute for Energy Studies in Warsaw, when asked about the reduced gas supplies to Poland.

Polish gas pipeline operator Gaz-System said the reduction in supplies from Russia had forced it temporarily to stop re-exporting natural gas to Ukraine.

Gazprom has halted supplies to Western-leaning Ukraine over a pricing dispute, and the “reverse flows” from neighbouring EU states are crucial for keeping Ukraine’s economy afloat.

Russia meets around a third of European gas demand, sending almost half of these supplies via Ukraine.

Most of the rest goes through the Yamal Europe route via Poland and on to Germany as well as through the Nord Stream pipeline, which goes directly from Russia to Germany under the Baltic Sea.

The disruption appeared to affect the Yamal Europe route only, with no significant reduction reported in volumes being shipped along other routes.

Polish gas monopoly PGNiG said that on Monday it received around 20% less gas than contracted and around 24% less on Tuesday. It said customers had not been affected for now, and the missing volumes were being met from other sources.

The company, in a statement, said it was seeking clarification on why the volumes were reduced.

Germany’s biggest utility, E.ON is facing slightly reduced gas supplies from Russia, a spokesman for the company said on Wednesday.

“This is not alarming due to well-stocked reserves and sufficient availability on hubs,” the spokesman said. He declined to say by how much supplies were reduced in percentage terms.

Under its contracts with customers, Gazprom has the right to adjust the gas export flow, and European utility traders said Wednesday’s fluctuations were within contractual ranges.

The reduced volumes are unlikely to have a knock-on effect for customers in Europe unless they drag on for weeks.

Mild temperatures mean that demand for fuel is relatively low, and European operators have been building up reserves of gas in storage in anticipation of possible disruptions.

Countries in central Europe which also receive gas from Gazprom, but by other routes, reported that there was no significant disruption.

Ties between Warsaw and Moscow are tense.

Poland has lobbied the European Union hard to impose tougher sanctions on Moscow, and it is to host elements of a new NATO rapid reaction force, created in response to the Russian intervention in Ukraine.

Weeks before Russia imposed restrictions on many food imports from Western countries, it had blocked imports of Polish apples and meat. Some Polish officials said Moscow was punishing Warsaw for its hawkish stance over Ukraine.

Twice in the past decade, Moscow responded to natural gas price disputes with Ukraine by cutting off supplies, affecting its European clients further down its pipelines.

But a cut-off would also hurt Gazprom hard. With revenue cut, Gazprom’s finances would be affected. It cannot compensate by borrowing from the West because sanctions bar Western financial services from lending to the firm.


– Upstream

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