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ENERGY TECH
Putin urges Gazprom to meet cold demand
by Staff Writers
Moscow (UPI) Feb 6, 2012

Russian gas flows to EU returning to normal: commission
Brussels (AFP) Feb 6, 2012 - Gas flows from Russia have returned to normal levels in six European Union nations and are increasing in Italy, Germany and Romania after a cold snap caused a shortfall, the EU said Monday.

Supplies are back to normal in Austria, Bulgaria, Greece, Hungary, Poland and Slovakia, said the European Commission's spokeswoman for energy, Marlene Holzner, adding that distribution improved over the weekend.

In Italy, Germany and Romania, gas flows "are increasing although they are not really back to levels we had before last week," she told a news conference.

"There is no emergency in Europe so consumers get their gas ... as before," she added.

Gazprom, already dealing with a cold wave in Russia, said Saturday it could not pump additional gas to Western Europe, after EU officials and energy firms said the Russian giant's deliveries had dropped in the nine EU nations.

Italy's Economic Development Minister Corrado Passera said the situation was "critical" and Italian energy giant ENI warned that it could be forced to start cutting off supplies to corporate customers from Thursday.

Holzner said the commission is "ready to help" if Italy asks, but she added that the country is "very diversified" and could buy gas from other EU states or companies if necessary.


Gazprom should do all it can to meet the natural gas demands of its European customers during a bitter cold wave, Russian Prime Minister Vladimir Putin says.

Putin, meeting with Gazprom officials Saturday in Moscow, urged the natural gas provider to meet the requests of foreign countries for higher amounts as Europe shivers through a freeze that has claimed more than 200 lives.

But he said those efforts must remain secondary to satisfying internal demand from members of the Russian Federation.

"I would like to ask you to exert maximum efforts to meet the demands of our foreign partners," Putin said at a meeting with Deputy Prime Minister Igor Sechin and Gazprom Deputy Chairmen Alexander Medvedev and Andrei Kruglov.

"The top priority of the energy generation industry in general and Gazprom in particular is to meet the internal demand in the Russian Federation. This is a top priority."

Putin's exhortation came after Kruglov admitted Gazprom had been unable to deliver extra gas sought by European customers as they coped with arctic conditions due to a Siberian air mass that sent temperatures plummeting to as low as minus 25 degrees Fahrenheit in Central and Eastern Europe.

The European Commission complained last week Russia had reduced gas deliveries to nine European countries, forcing them to tap imported liquefied natural gas from other countries as well as stored volume.

"There were several days when the supplies decreased slightly, by about 10 percent, and on one day there was a reduction of supplies for Poland and Italy," Kruglov told Putin. "But that was a matter of a few days only; otherwise the orders are filled in full."

Kruglov also said Gazprom isn't able to supply European customers more than their contracted amounts of gas to help battle the cold snap.

"Currently we have seen a rise in the requested volumes," he told Putin. "We have an approved schedule of supplies to Western Europe. We are keeping up with the schedule but we will not be able to supply the extra volumes our western European partners are requesting from us. We are only supplying gas in accordance with the contracts."

Particularly hard hit by the cold snap has been Ukraine, where most of the weather-related fatalities have occurred.

Officials told the BBC 101 people died of exposure to the cold last week, most of them homeless and living on the streets. The broadcaster said local governments have had to scramble to cope with the disaster, with resources being stretched to the limit.

Kiev, which is seeking to amend its 2009 long-term contract with Gazprom over price levels, received more than its contractually obligated amount of 135 million cubic meters per day last week, instead taking 150 million to 170 million cubic meters per day, Kruglov told Putin.

That happened despite Ukraine's announced intention to unilaterally reduce the 27 billion cubic meters minimum it had agreed to buy this year through the disputed the contract.

In fact, at the rate of last week's consumption, Ukraine would end up exceeding the 50 billion-cubic-meter upper-end limit of its deal, the Gazprom officials said.

"As long as the amount remains under 50 (billion cubic meters), it would be within the bounds of the contract, while everything in excess of 50 goes beyond the contract they wanted to amend," Putin noted.

He added, "Nevertheless, we must help Ukraine and meet their demand in full."

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Italy begins gas supply cuts after Russia shortfalls
Rome (AFP) Feb 6, 2012 - Italy activated an emergency plan on Monday to reduce gas supplies to industrial clients and switch from gas-fired to oil-fired power stations following a plunge in gas imports from Russia.

The decision, taken at a meeting of an emergency committee at the economic development ministry, was aimed at maximising supplies to households living through the coldest weather in Italy in decades, ANSA news agency reported.

The gas cuts were to corporate clients that had agreed to potential supply reductions in their contracts with Italian energy giant ENI.

A spokesman for ENI confirmed the contents of the committee meeting.

ENI's chief executive Paolo Scaroni said earlier on Monday: "We are in an emergency and we have reacted to this emergency by increasing gas imports from Algeria and from northern Europe via Switzerland.

"We won't have problems until Wednesday," he said on new channel Radio 24.

The ENI boss said: "We are expecting another cold wave in Russia and we don't know how (Russian gas giant) Gazprom will behave on Thursday and Friday. We are preparing for difficult times ahead."

The shortfall in gas imports from Russia was 11 percent on Wednesday, 24 percent on Thursday, 29 percent on Friday, 29 percent on Saturday and 22 percent on Sunday, figures from the Snam Rete gas network showed.

Initial figures showed supplies were down 17.6 percent on Monday.

"The situation is certainly critical because the flows from Russia and France have diminished but the situation is being monitored," Economic Development Minister Corrado Passera told reporters.

"Yesterday we passed into a state of emergency because consumption was at its highest ever and so we have to be ready for demand being even higher than forecast," he said.

Gazprom on Saturday said it could not pump additional gas to Western Europe following drops in supplies registered in Austria, Bulgaria, Germany, Greece, Hungary, Italy, Poland, Romania and Slovakia.

The EU imports about four-fifths of its gas requirements. Russia accounts for about a third of Europe's gas imports, according to Eurostats.



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