Gazprom cuts gas to Poland; Ukraine left short; Europe stockpiles

On Wednesday this week, Poland halted its supply of reverse gas to Ukraine, citing a reduction in supply from Gazprom.

PGNiG, the state-owned Polish oil and gas company, said in a statement that its supplies from the east had been reduced by 45%. Gazprom, however, denied there had been a reduction.

Ukraine has already been scrambling to find sources of gas after Russia cut off its supply, citing a pricing dispute.

The Ukrainians had hoped to have the gas come from larger pipelines, but instead the Vojany-Uzhgorod pipeline, which was not being used, was retrofitted to send gas east. When the pipeline was opened last week, Klaus-Dieter Borchardt, the European Commission’s Director of Internal Energy Markets, acknowledged, “It is not a highway we are opening today, but it is more than a bike lane.”

Even with the new Slovak capacity, it is expected that Ukraine will have to cut its gas use by about a fifth.

Since gas is still flowing through Ukraine bound for Europe, Russia has already warned about the potential for siphoning. Russia, of course, can simply send less gas to Europe.

Fears further afield in Europe

The decision by Russia to cut gas exports to Poland without warning has rekindled fears about Europe’s reliance on Siberian gas at a time of increasing tension between Moscow and the west.

Gazprom supplies a third of Europe's gas and for many EU countries it is the main source of power for homes and industry but the Russian firm is a big revenue earner for the Kremlin and any volume cuts would damage the company and country financially.

Stockpiling

The European Union’s 28 member states have been stockpiling gas in record quantities as they prepare for the possibility that Russia may turn off the tap.

For the first time ever, Europe’s collective storage tanks are almost full – containing almost 80 billion m³ of gas – almost a fifth of the bloc’s yearly useage.

The EU is also drawing up contingency plans that would ban companies from selling tanker cargoes of liquefied natural gas (LNG) outside Europe and order industry to stop using gas.

Edited from various sources by Elizabeth Corner

Sources: New York Times, The Guardian, The Independent

Read the article online at: https://www.worldpipelines.com/business-news/12092014/gazprom-cuts-gas-to-poland-ukraine-left-short-europe-stockpiles/