2009 Russia–Ukraine Gas Dispute - Impact On Europe

Impact On Europe

On January 2, a day after Russia cut off gas supplies to Ukraine, Hungary, Romania and Poland were the first countries to report that pressure in their pipelines had fallen. Bulgaria reported that their supply was also falling and that transit to Turkey, Greece and Macedonia was affected. Two days later the Czech Republic and Turkey reported drops in pipeline pressure. Starting on January 7, several countries began to report a significant drop in gas supplies from Russia. Throughout the crisis many countries were unprepared and had been left without supplies for days, leading to significant economic and humanitarian consequences; Bulgaria was forced to stop production in some of its important industrial plants, while one country, Slovakia, declared a state of emergency. The most severely effected countries were in Southeastern Europe, most of which rely completely on Russia for gas and at the time didn't have sufficient alternative energy sources. However North-West Europe wasn't much effected by the cutoff and none of Europe's major markets came close to cutting off customers. Many European countries had made investments since the 2006 crisis which put them in a better position.

The following table displays the gas situation in each of the affected countries at the time of the crisis:

Country % of imports from Russia % cut Diversification Gas storage Alternative fuel
Bulgaria 96% 100% No diversification Gas storage for 2–3 days, covering 35% of gas demand Alternative fuel for 20 days
Slovakia 100% 97% No diversification Gas storage for several weeks, covering 76% of gas demand Alternative fuel for one month
Greece 82% 80% Only LNG terminal, fully capable, booked more ships Only in LNG terminal One gas power plant switched to oil, sufficient until end of January
Austria 74% 66% Increased imports from Norway and Germany Gas in storage for several weeks Yes
Czech Republic 79% 71% Increased import by 8 mmcm/day from Norway, and via Yamal/Germany Gas from storage 40 days, 15% increase of domestic production Not used now, could be coal and oil
Slovenia 64% 50% Gas from Algeria via Italy, and from Austria but not increased amount Gas from storage in Austria until Monday then possible decrease of supply by another 20% Yes
Hungary 54% 45% Increased gas from Norway by 5% Gas storage for 45 days Alternative fuel – crude 90 days, fuel oil 30 days
Poland 47% 33% Half of the cut covered by Yamal, more gas from Norway Gas storage for several weeks Yes
Romania 28% 34% No diversification Increased domestic production (60%) and withdrawal from storage Yes
Germany 36% 10% +20 mmcm receiving from Yamal, more from Norway and Netherlands Gas storage for several weeks Not used now
Italy 25% 25% Increased import from Libya, Norway, and Netherlands 79% full, covers 50% of demand Not used now
France 20% 15% Industry covered 80% full Not used now
Serbia 87% 100% 12% renegotiated with HU 1 mmcm, less than one day, 8% covered by production 3 weeks of fuel oil
Bosnia 100% 40% No diversification No storage Fuel oil only for 20 days
Macedonia 100% 100% No diversification No storage Fuel oil stocks need only for industry
Croatia 37% 40% Diversification to Italy, but not used, negotiations ongoing Increased domestic production (43%) and storage withdrawal, 500 mmcm stored Fuel oil for industry
Moldova 100% 100% No diversification No storage No alternative

None of Gazprom's European clients have sued Gazprom for irregularities in gas shipments in January 2009, hence Gazprom suspended its litigation with Naftogaz Ukraine at the Arbitration Institute of the Stockholm Chamber of Commerce over alleged violation of contractual terms on transiting natural gas to Europe by Naftogaz late December 2009.

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