Gazprom pays bills: Europe is looking for alternative gas suppliers

Worst forecasts that the greatest losses in the recent gas war between Kiev and Moscow will be suffered by Gazprom come true. The concern begins to absorb the losses of other countries from shortages of Russian fuel. The monopolist agreed to satisfy Bulgaria’s claims for damages for gas shortages. Sofia’s success sets an unpleasant precedent, which other European companies can try to use.

According to estimates by the Bulgarian government, the damage from gas shortages amounted to about 500 million leva, or about 250 million euros. At the same time, the Bulgarians offered Russia three possible ways to compensate for their losses: direct cash payments, gas supplies at a reduced price, or by providing Bulgaria access to the Russian gas transmission network in order to be able to receive gas from third countries. Sofia’s claims against Gazprom have grown many times in just two days. The head of the Bulgarian government, Sergey Stanishev, estimated his country’s losses from shortages of Russian gas at 86 million euros.

The time has come when any party, declaring itself to be a victim of the conflict, may try to achieve some preferences: “This concerns the claims of the German concern. “E.On Ruhrgas, despite being a long-standing partner of Gazprom, in the current difficult situation is not at all averse to knocking out some benefits for itself, exposing the requirements of the Russian company.”

Now, the largest German importer of Russian gas, E.On Ruhrgas, is calculating the losses. “We will certainly contact Gazprom when we find out the amount of losses,” the head of the German concern Bernhard Reutersberg said at the end of last week in Essen, noting that gas supply contracts contain clear rules in case of suspension. Moreover, he accused the Russian authorities of using gas as a means of pressure on Ukraine. So far only Austria has been able to sweeten the bitter pill. Recently, a member of the board of the country’s largest oil and gas concern – OMV – Werner Auli said that OMV did not incur losses due to the blockade of transit deliveries of Russian gas, and therefore does not intend to file lawsuits against Gazprom.

Europeans are gradually starting to get out of the state of shock experienced by them in the cold weeks of the Russian-Ukrainian gas confrontation. In Germany today they are not looking for the guilty, trying to understand what to do next, how to protect themselves from similar risks in the future. As the main means most often called the rejection of unilateral dependence on the “Russian gas crane.” Such sentiments prevailed at the Handelsblatt newspaper Energy Congress last week in Berlin, more than half of whose participants were top executives of major industrial companies and the financial sector.

One of the first countries to advocate economic rapprochement with Russia was Hungary. At the end of last week, this was discussed by Russia’s First Deputy Prime Minister Viktor Zubkov and Hungarian Finance Minister Janos Veres. The publication writes that claims are not only addressed to Russia: court proceedings threaten Kiev. The possibility of filing a lawsuit against Ukraine was recently announced by Serbian President Boris Tadic. According to preliminary estimates, the Union of Entrepreneurs of Serbia, the loss of industrial consumers exceeded 1.5 billion dinars, that is, 220 million dollars. If claims of Gazprom’s European partners are redirected to Kiev, financial claims against Naftogaz could reach 4 billion euros.

The Slovak government has suggested that Gazprom create a joint venture that would deal with gas distribution in the domestic market. Slovakia is 100% dependent on Russian gas supplies and during the gas conflict with Ukraine suffered the most than other countries. However, analysts believe that Slovakia is unlikely to count on a big discount in price and increased reliability of supplies.

Pipe through the pyrenees

Portugal and Spain are looking for an alternative to gas from Russia

Portuguese Prime Minister Jose Socrates vowed on Saturday that he would spare no efforts to pull the country out of the economic crisis, using, among other things, the fact that gas transit from Africa to Europe is on its territory. Now Portugal and Spain, two neighboring countries on the Iberian Peninsula, are preparing projects for new gas pipelines to France and new terminals for receiving liquefied natural gas. These plans could accelerate the January gas conflict between Russia and Ukraine. European countries are looking for an alternative to Russian gas.

“These plans will provide southern Europe with blue fuel from Africa, which would reduce dependence on Russian gas in transit through Ukraine,” the head of the Portuguese energy company REN, Jose Penedus, recently explained. According to him, “now Portugal and Spain could help the European Union reduce pressure from Russia.”

The Portuguese Delovaya Gazeta is confident that Portugal and Spain will soon find an “alternative to Russian gas”. Previously, this publication reported that the European Commission, led by the Portuguese Jose Manuel Barroso, intends to “use the geostrategic position of the Iberian Peninsula as an alternative to Russia.” The gas conflict between Moscow and Kiev spurred Brussels, now expressing its willingness to support politically and financially the creation of a gas market in southern Europe.

As early as January 12, at the emergency meeting of the European Council on energy security in connection with the temporary suspension of gas supplies from Russia, Portuguese Minister of Economics Manuel Pinho spoke about this. The Portuguese press claims that the European Commissioner for Energy, the Latvian Andris Piebalgs, is also a supporter of the “Iberian project.”

Now, natural gas is supplied to the Iberian Peninsula via the Maghreb-Europe gas pipeline, laid along the bottom of the Mediterranean Sea from Algeria, and by sea from Nigeria to six terminals for the reception of liquefied gas in the ports of Spain and one terminal in the Portuguese port of Sines. In terms of power, these terminals are superior to all existing in Europe. But in Portugal’s energy needs, gas stands in a modest place (only 14%) after oil (58%) and renewable energy sources (15%).

On January 22, in the Spanish city of Zamora, the 24th summit of the leaders of Portugal and Spain was held. The meeting was attended by more than two dozen ministers from both countries. According to the results, it was announced the creation of a common energy market from June 15 this year. The weak point of this Iberian (so-called Pyrenees) alternative is the lack of a gas pipeline from Spain to France, because these two countries are separated by a high Pyrenees ridge. To overcome this obstacle, Madrid and Paris are already designing the construction of the Midcat pipeline.

However, Portuguese Foreign Minister Luis Amadou (pictured) told Vremya Novostei that so far Lisbon “has no official position on this issue”: “So far, these are just considerations put forward by energy companies”: “The European Commission, of course, is closely following “by the problems of natural gas supplies to the EU countries and is exploring all options for solving the problem, as it seeks to diversify sources and routes of energy supplies.” According to the minister, “the Portuguese government did not submit a proposal for this alternative to the European Commission, although this is a very encouraging prospect for our companies involved in the delivery of hydrocarbons from Africa.”

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