Russian gas cut to Ukraine unlikely to hurt Europe

GMT 22:32 2014 Friday ,29 August

Arab Today, arab today Russian gas cut to Ukraine unlikely to hurt Europe

A Russian gas power plant in the Russian Black Sea
Paris - AFP

 Moscow's latest warning that Europe could run short of Russian gas this winter lacks credibility, analysts say, as the prospect of new Western sanctions over the Ukraine crisis rises.
Russia is the EU's top supplier of gas which much of the supplies transiting through Ukraine. The 28-nation bloc depends on energy imports for more than 50 percent of its needs, and roughly 40 percent of supplies come from Russia.
Russia in mid-June cut its deliveries for Ukraine after a pro-Western government took power, saying that Kiev had not be paying its bills on time.
But Russian gas destined for other parts of Europe was still flowing through Ukraine.
On Friday, however, Russian energy minister Alexander Novak warned that there was "a high risk that gas delivered by Gazprom for Europe will be illegally taken by Ukraine for its own use".
The warning came just a day before EU leaders were due to meet to discuss possible new sanctions against Russia, which they believe is directly involved in the insurgency in east Ukraine.
Moscow has a history of using energy supplies as a political weapon and has twice turned off the tap to Ukraine in the past decade, causing supply disruptions to Europe in 2006 and 2009.
Ukraine has recently acknowledged that it does not have sufficient reserves to make it through the winter and accused Russia of wanting to cut provisions to Europe.
Marie-Claire Aoun, director of the Centre for Energy at the French Institute of International Relations said Ukraine could be tempted to siphon off some of the billions of cubic metres of gas flowing through its territory if Moscow continues to cut off sales to its neighbour.
"Ukraine has so far been able to use its own gas stocks. But it is possible that it may at some point draw off some gas streams destined for the EU if it can no longer meet its needs," she said.
- Europe prepared -
But according to Aoun, Europe has learnt from the 2009 supply disruption and has improved its capacity to respond to any likely Russian gas cut.
European underground gas storage facilities, buoyed by a mild winter, were 87 percent full as of Thursday -- enough to ensure 10 days of continuous consumption in the event of a disruption.
The continent has also diversified its gas network, developing pipelines that could re-route gas from alternative sources.
This week Romania opened a new gas pipeline to Moldova, designed to wean the former Soviet state off dependence on Russia for its energy needs.
Norway, Europe's number two gas supplier, said it could also compensate slightly for any decline in Russian deliveries.
"In the short term, during a crisis, we could increase (supplies) a bit, but over the longer term if we are to deliver more natural gas to Europe we need more pipeline capacity and a market that wants to buy the gas," Norway's Foreign Minister Boerge Brende said Friday at a conference in Oslo.
Gerard Mestrallet, CEO of energy giant GDF Suez, also pointed out that it was not in Russia's interest to enforce a prolonged shutoff.
"Russia has a major interest in selling gas to Europe. It is its biggest customer," he said.

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