The cat and mouse game between Europe and Russia on gas intensified yesterday with Slovakia saying its supply from Russia was down by a half and its Prime Minister calling the move part of a political fight.
Since September, Russia’s state-controlled Gazprom has sent less-than-requested deliveries to Poland, Slovakia, Austria and Hungary – after the EU began sending gas to Ukraine – in a clear warning from Moscow ahead of the winter heating season which officially started yesterday, when the industry switches to higher pricing.
The cut of 50 per cent reported by Slovakia, a major hub for Russian gas exports to other European countries, was by far the deepest yet, and Prime Minister Robert Fico said he would call a crisis meeting of his government if the problems persisted.
“The Russian side talks about technical problems, about the necessity of filling up storage for the winter season,” Fico said. “I have used this expression and I will use it again: gas has become a tool in a political fight.”
Gas has become a tool in a political fight
There was no immediate comment from Russian gas exporter Gazprom
It was unlikely there will be any impact for now on consumers of gas in Slovakia, or the countries further West that receive it via there, because gas storage reservoirs throughout Europe are close to full.
As well as shipping Russian gas west, Slovakia also sends it east into Ukraine. That has irked Russia, which switched off gas deliveries to Ukraine to persuade Kiev to pay its arrears.
“Nobody should be surprised by what Russia does. They want to keep pressure on Ukraine... at the start of the heating season,” said Michael LaBelle, a gas expert at the Central European University in Budapest.
Central European spot gas markets rose to over 25 euros per megawatt-hours (MWh), their highest levels since the Ukraine crisis broke out in February/March.
Russia is Europe’s biggest supplier of natural gas, meeting almost a third of annual demand and in return, Gazprom receives around $80 billion in annual revenues from its European customers, making up the majority of its income.
Moscow halted gas flows to Ukraine three times in the past decade, in 2006, 2009 and since June this year, although this year gas for the EU via Ukraine has so far continued to flow.
Opening up gas flows eastward was part of the EU’s response to Gazprom’s decision to cut supplies to Kiev in June. Slovakia, Poland and Hungary can also send gas to Ukraine but so far deliveries have not been without incident.Poland temporarily stopped deliveries to Ukraine last month after Warsaw said it was getting less gas from Russia than requested. Hungary stopped eastward supplies last week in order to fill its own storage tanks ahead of winter.
Slovakia, with the largest EU-capacity to Ukraine, had maintained deliveries.
Analysts agree the moves are a warning to Europe that Russia is ready to retaliate should Brussels impose further sanctions on Moscow over its intervention in Ukraine.
“It (the Russian export reductions) could actually be in the end quite harmless. But the fact that they did not tell anyone in advance, shows that nobody should trust any explanation he or she gets, and that in itself is damning,” Czech energy security ambassador Vaclav Bartuska said.