http://www.bloomberg.com/news/2014-06-16/europe-s-swollen-gas-reserves-guard-against-repeat-of-06-crisis.html
The European Union’s biggest gas inventories in three years are cushioning the region from Russian supply disruptions and helping avoid a repeat of previous crises when prices rose as much as fourfold.
OAO Gazprom, Russia’s state-run gas company, cut supplies to Ukraine yesterday after a deadline for debt payment expired. The move echoed similar disputes that disrupted shipments to Europe during freezing weather in 2006 and 2009. Europe, dependent on Russian gas piped through Ukraine for about 15 percent of its needs, has tried since May 2 to broker a deal to maintain flows. European gas prices, which rallied the most since March yesterday, erased gains today.
Storage in the 28 member states was 65 percent full as of yesterday, the highest for this time of year since 2011, according to Brussels-based lobby group Gas Infrastructure Europe. U.K. prices, a regional benchmark, probably won’t gain more than 5.6 percent, assuming the cut lasts two weeks or less, Trevor Sikorski, an analyst at Energy Aspects Ltd., a consulting firm to the industry in London, said yesterday.
Flows to at least 20 European countries were affected for almost two weeks in 2009 after talks between Russia and Ukraine collapsed. Gazprom accused Ukraine of siphoning off gas meant for the EU, a charge the nation denied. Storage sites in Ukraine were 42 percent full yesterday, according to GIE data. Ukraine can go “quite long” without signing another deal for gas supplies with Russia, Naftogaz’s Kobolyev said.
The European Union’s biggest gas inventories in three years are cushioning the region from Russian supply disruptions and helping avoid a repeat of previous crises when prices rose as much as fourfold.
OAO Gazprom, Russia’s state-run gas company, cut supplies to Ukraine yesterday after a deadline for debt payment expired. The move echoed similar disputes that disrupted shipments to Europe during freezing weather in 2006 and 2009. Europe, dependent on Russian gas piped through Ukraine for about 15 percent of its needs, has tried since May 2 to broker a deal to maintain flows. European gas prices, which rallied the most since March yesterday, erased gains today.
Storage in the 28 member states was 65 percent full as of yesterday, the highest for this time of year since 2011, according to Brussels-based lobby group Gas Infrastructure Europe. U.K. prices, a regional benchmark, probably won’t gain more than 5.6 percent, assuming the cut lasts two weeks or less, Trevor Sikorski, an analyst at Energy Aspects Ltd., a consulting firm to the industry in London, said yesterday.
Flows to at least 20 European countries were affected for almost two weeks in 2009 after talks between Russia and Ukraine collapsed. Gazprom accused Ukraine of siphoning off gas meant for the EU, a charge the nation denied. Storage sites in Ukraine were 42 percent full yesterday, according to GIE data. Ukraine can go “quite long” without signing another deal for gas supplies with Russia, Naftogaz’s Kobolyev said.
2005 Dispute
U.K. gas prices rose from 26.29 pence in June 2005 to as high as 116.3 pence in November that year on ICE as the dispute over prices between Russia and Ukraine dragged on. Russia cut supplies on Jan. 1, 2006.
Unlike in previous disputes, Europe can now avoid Ukraine and get some of its supplies via the Nord Stream pipeline connecting Russia and Germany through a link under the Baltic Sea. Gazprom said June 13 it was ready to increase flows through that route in case of disruptions.
Rebels who say they want to join Russia are clashing in eastern Ukraine with government forces, and 49 people died when the insurgents shot down a military plane on June 14. Russia has moved about 16,000 troops to Ukraine’s eastern frontier and has another 22,000 in Crimea, the Black Sea peninsula annexed by Putin, Andriy Parubiy, Ukraine’s National Security Council chief, told reporters in Kiev yesterday.
An employee adjusts a valve wheel at the Bilche-Volytsko-Uherske underground gas storage site, operated by Ukrtransgaz, a unit of Ukraine's state energy company NAK Naftogaz Ukrainy, in Lviv, Ukraine.
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