Thursday, January 22, 2009

Germany Receives Natural Gas

By Amanda Jordan

Jan. 21 (Bloomberg) -- Germany, Europe’s biggest energy market, was among European Union states to report full deliveries of Russian natural-gas via Ukraine after exporter OAO Gazprom resumed shipments yesterday.

E.ON Ruhrgas AG, the gas unit of Germany’s largest utility, is getting complete volumes of gas, the company said today in an e-mailed statement. The central European country, the biggest foreign customer of Russian gas, had drawn fuel from stockpiles the past two weeks to meet demand.

States further east began to receive Russian gas via Ukraine yesterday as Gazprom turned on the taps after a 12-day halt. More than 20 nations were affected by the cutoff as the two former Soviet neighbors refused to compromise in a spat over pricing, transit fees and outstanding debt. A truce reached over the weekend paved the way for a resumption in shipments.

Slovakia was the first nation to receive gas, followed by Hungary, Czech Republic, Austria, Poland, Romania, Bulgaria, Serbia and Slovenia. Countries that had tapped reserves, sourced alternative imports and restricted gas use during the crisis announced an end to emergency measures. Russia supplies a quarter of Europe’s gas, about 80 percent of which passes through Ukraine.

Slovakia, Czech Republic

Russian gas entered Slovakia yesterday morning, Economy Minister Lubomir Jahnatek said at a press conference. Slovakia had curbed gas consumption for industrial users during the crisis, leading to output cuts at companies including carmakers. Czech gas trader RWE Transgas AS received Russian deliveries last night, RWE AG spokeswoman Annett Urbaczka said today from Essen, Germany.

Gas reached the Austrian border yesterday, Economy Minister Reinhold Mitterlehner said in Vienna. Austria gets 51 percent of its gas from Russia, according to OMV AG, the country’s biggest oil and gas company. Hungary registered the arrival of supplies at 1:20 p.m. local time yesterday, Edina Lakatos, a spokeswoman for gas-network operator FGSZ Zrt., said in an e-mail.

Gazprom and Ukrainian state utility NAK Naftogaz Ukrainy signed a 10-year gas contract on Jan. 19, a deal welcomed by European Commission President Jose Barroso, who also called for new energy routes and sources to protect the EU in the event of future supply disruptions.

“This painful episode is a sharp reminder that the EU needs to take energy security seriously,” Barroso said yesterday at the commission’s Brussels headquarters. Russia and Ukraine hurt their credibility by failing to respect earlier pledges to reopen pipelines, he said.

Nabucco Boost

Barroso’s comments may boost efforts to bring the OMV-led Nabucco pipeline project to fruition. The planned 3,300-kilometer (2,050-mile) link would carry Caspian gas via a route from Turkey through Bulgaria, Romania and Hungary to western Europe from 2013.

Hungary’s ambassador for the 7.9 billion-euro ($10.6 billion) project, Mihaly Bayer, said the gas crisis had increased the chances of realizing Nabucco, according to Nepszabadsag. The dispute has raised the willingness of EU countries to back the plan, Bayer said in an interview with the newspaper.

Austria’s Mitterlehner said yesterday that the country would “work on diversifying our gas supplies, for instance with Nabucco.”

Turkey this week urged a speedy agreement on the Nabucco link and presented draft accords for the pipeline prior to a meeting of the project’s partners in Budapest on Jan. 27.

“The latest natural-gas crisis has demonstrated that Turkey’s insistence on wrapping up Nabucco is very well- founded,” Energy Minister Hilmi Guler said in an interview.

Slovenia, Poland

Slovenia started receiving gas from Russia at 5 p.m. local time yesterday, Alojz Stana, director of state-owned distributor Geoplin d.o.o, said today in a statement. The country, which imports 60 percent of its gas from Russia, has been able to ensure stable flows to companies and households by using alternative supplies during the shutdown, he said.

Gaz-System SA, Poland’s gas-pipeline operator, started to receive Russian gas at the Drozdowicze entry point, spokeswoman Malgorzata Polkowska said today. Poland, which relies on Russia for about 45 percent of its gas, tapped storage and increased shipments via Belarus during the shortage.

Romania, which usually gets about 7.2 million cubic meters of gas a day, or 12 percent of its needs, from Russia, also got deliveries today, Economy Minister Adriean Videanu said.

“We’re importing 3 million cubic meters of gas as of this morning through two stations,” Videanu told reporters in Bucharest. “This is all we need now as consumption dropped because of milder weather.”

Serbia, Bulgaria

Neighboring Serbia announced the delivery of imports from Russia this morning.

Utility Srbijagas is getting the full 10 million cubic meters of gas contracted, General Manager Dusan Bajatovic said by phone from Belgrade. “We are expecting normalization of supplies to all our customers by the end of the day,” he said.

Bulgaria also said Russian gas deliveries had been fully restored. Following the resumption in supply, the country has lifted all restrictions on consumption, Prime Minister Sergei Stanishev said today at a press briefing in Sofia.

The agreement reached during the weekend in Moscow requires the transit of as much as 120 billion cubic meters of Russian gas to Europe this year through Ukraine, which will buy 40 billion cubic meters for its own market.

The price of gas for Ukraine will be $360 per 1,000 cubic meters in the first quarter and adjusted quarterly until next year, when the country moves to a “European market price,” Gazprom said in a statement.

To contact the reporter on this story: Amanda Jordan in London at

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