EU Says It Is Prepared For Partial Disruption Of Russian Gas Flows

The European Union would be able to cope with a partial disruption to gas imports from Russia, European Commission President Ursula von der Leyen said.

Escalating tensions with Russia over Ukraine have raised concerns about Russian gas flows to Europe, prompting the EU to review its contingency plans for supply shocks, and EU and U.S. officials to seek alternative supplies. 

“Our models now show that for partial disruption or further decrease of gas deliveries by Gazprom, we are now rather on the safe side,” von der Leyen told reporters in Strasbourg on Tuesday.

Russia supplies about 40% of Europe’s natural gas. Gas prices soared in Europe as tight supply collided with high demand in economies emerging from the COVID-19 pandemic last year, and amid lower than expected imports from Russia.

The EU has spoken with the United States, Qatar, Egypt, Azerbaijan, Nigeria and South Korea about increasing gas and liquefied natural gas (LNG) deliveries, either through additional shipments or contract swaps, von der Leyen said.

“We have also spoken to major suppliers of LNG… in order to ask whether we could swap contracts in favour of the EU,” she said, adding that Japan was willing to do this.

“These efforts are now distinctly paying off.”

Japan last week said it would divert some LNG cargoes to Europe, in response to EU and U.S. requests. European LNG imports hit a record high of around 11 bcm in January, with just under half coming from the United States.

The potential short-term impact of a disruption to Russian gas supply has eased as Europe heads towards spring, when demand for gas-fuelled heating typically declines. Europe’s gas storage levels are currently around 34% full.

Von der Leyen said infrastructure development in recent years meant Europe was better equipped to distribute gas and power between countries, but that a complete halt to Russian gas supplies would still require additional measures.

EU rules require countries to have a plan to respond to a gas supply crunch, including potential government interventions such as curtailing industrial facilities to prioritise gas supplies to households.

EU countries are responsible for their own energy policies, and reliance on gas differs from state to state. Denmark’s main power source is wind, for example, while Hungary produces electricity mainly from nuclear and gas.

Von der Leyen said Russia’s military build-up near Ukraine had emphasised the need for Europe to curb reliance on Russian gas, and this would be aided by its planned shift to renewable energy.

Source: Reuters