Tue, Feb 09 2010

Is the EU ready to face another Russian gas crisis?

Thu, Nov 19 2009 10:13 CET 1842 Views 3 Comments
Is the EU ready to face another Russian gas crisis?

Ukraine's prime minister Yulia Tymoshenko with her Russian counterpart Vladimir Putin at January 18 2009 talks on the natural gas crisis. The two were scheduled to meet again on November 19 after Moscow said that Ukraine was likely again to have difficulty paying it gas bill, raising the spectre of another natural gas crisis in Eastern Europe.

All that can be said with certainty about the question of a repeat of the January 2009 crisis caused by a cutoff of Russian natural gas supplies is that there is no firm guarantee that there will not be one.
 
Talks in recent days between the European Union and Russia have produced only an agreement that Moscow will give the bloc early warning of a gas cutoff.
 
Russia has signalled that Ukraine could again have trouble keeping up payments due. Russian prime minister Vladimir Putin was scheduled to meet his Ukrainian counterpart Yulia Tymoshenko on November 19 2009 for talks.
 
Bulgaria, one of the countries hardest-hit by the January 2009 suspension of natural gas supplies, the result of a standoff between Russia and Ukraine, has sent mixed signals.
 
Prime Minister Boiko Borissov said that the country is better prepared, having stepped up its natural gas storage and having arranged assistance agreements with Greece and Turkey.
 
Replying to questions in Parliament on November 13 2009, Economy and Energy Minister Traicho Traikov said that Bulgaria was prepared to face a new gas crisis, having stored sufficient reserves at the Chiren facility to last for nine months in the event of a complete cutoff of gas supplies from Russia.
 
However, Foreign Minister Roumyana Zheleva said that the European Commission had not yet sent promised money to pay for two gas interconnectors to link Bulgaria’s network to a pipeline in Greece and to the network of Bulgaria’s northern neighbour Romania.
 
In contrast to Traikov’s statement, Zheleva said that it could take years for Bulgaria to be completely ready to face a prolonged cutoff of Russian gas supplies.
 
In the medium-term, Bulgaria could be somewhat better off as a result of a deal signed with Azerbaijan on November 13.
 
An agreement signed on that day in Sofia during a visit by Azerbaijan president Ilkham Aliyev will see more than a billion cu m of Caspian natural gas supplied to Sofia from a starting date some time in the next two years. There are a number of options for the gas to reach Bulgaria - via a connection to a pipeline that is to carry Azerbaijan gas through Turkey and Greece to Italy, through pipelines via Georgia and Turkey and possibly through the planned Nabucco pipeline.
 
As to the EU as a whole, a statement on November 17 said that the bloc’s Gas Co-ordination Group, which is chaired by the European Commission, saw an "overall good level of preparedness" among EU member states and Energy Community countries in the event of a gas crisis.
 
The statement said that at a meeting that day, the group had analysed in detail all elements of the preparedness of the EU and the Energy Community for a potential supply disruption in the winter 2009/2010.
 
The Gas Co-ordination Group examined gas consumption and storage levels in the EU and assessed emergency responses that have been put in place by members since January 2009.
 
Special focus was given to the countries mostly affected by the January 2009 crisis in South Eastern Europe and the Energy Community parties.
 
"In particular, the group noted the full levels of storages in almost all member states and that a number of short-term commercial agreements have been put in place to cover for the emergency case in those countries most hit by the January crisis," the statement said.
 
"New reverse flow projects have been identified and are being implemented. The European Recovery Plan provides a stimulus of 1.44 billion euro for new gas interconnectors and reverse flow projects. In addition, industrial gas demand has dropped in 2008/09 due to the economic crisis. Gas and LNG prices have come down at European hubs," according to the statement.
 
The group said that it had noted the need to co-ordinate emergency planning and implement the necessary infrastructure projects for the security of supply together with regional partners.
 
Previously, at an October meeting, the group assessed the progress of various regional gas initiatives, including joint emergency planning.
 
The European Commission asked the members of the Gas Co-ordination Group to run supply disruption scenarios at EU and regional levels to identify the best possible responses to a disruption of gas supplies."
 
In order to improve the level of preparedness of the member states, the industry and the European Union in case of a supply disruption, the European Commission proposed a new regulation on security of gas supplies in July 2009.
 
"The January 2009 gas crisis showed that a more coordinated approach is needed on a European level to provide stable and secure energy supply to European citizens," the statement said.
 
The draft regulation suggests common infrastructure and supply standards to protect customers, as well as the elaboration of preventive action plans and emergency plans at national, regional and EU levels.
 
An October 2009 meeting of the European Council of the bloc’s heads of state and government urged member states and the European Parliament to make fast progress on the European Commission proposal for the security of gas supply.
 
The Gas Co-ordination Group said that it would meet again on December 14 2009 to ensure the continuous assessment of the security of supply situation in the EU during winter 2009/10.
 
Separately, Russian news agency RIA Novosti reported from Moscow that the decrease in 2009 of Russian natural gas sales to Europe would cause problems for Gazprom.
 
Alexander Pasechnik, chief analyst at the National Energy Security Foundation, said on November 18 that the record decrease was because of trends in EU economies and competition.
 
The decrease would reduce Gazprom's available funds and affect its investment programmes, Pasechnik was quoted as saying.
 

Comments

Anonymous Valeri Thu, Nov 19 2009 22:31 CET
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All EU has to do is give the money to Ukraine so that they can pay their bill.
Oh, forgot - also tell them not to steal Russian gas - that'd leave BG in the cold, like last time...

Anonymous Kappa Thu, Nov 19 2009 13:32 CET
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Lora, that is not happening anytime soon.

Anonymous Lora Thu, Nov 19 2009 11:46 CET
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North American shale gas could neutralize the Russian energy threat to Europe

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