A pipeline is at the Russian gas compressor station in Sudzha near the Russian-Ukrainian … (+)
Russia’s large-scale invasion of Ukraine in February 2022 highlighted Europe’s dependence on Moscow for its natural gas supplies. Countries on the continent that could turn to alternative sources – notably liquefied natural gas (LNG) from the US – have subsequently done so. But many landlocked countries in Central Europe have found themselves in a bind and are once again worried.
This happened after Ukraine unexpectedly went from defensive to offensive and invaded Russian territory. Kyiv’s surprise advance into Russia’s Kursk region on August 6 again raised the threat of supply disruptions in Central Europe and their domino effect on the rest of the continent.
For comparison, Russian gas will continue to be transported through Ukraine under a contract that ends in December 2024. The total annual volume is 14-15 billion cubic meters. The main recipients are Slovakia (6.5 billion cubic meters), Austria (6 billion cubic meters) and Hungary (1 billion cubic meters) within their respective national supply chains.
As a temporary solution, the three landlocked countries even agreed to pay the Russians in rubles while they worked desperately to find alternative sources of supply until the end of the contract.
However, the end of gas supplies could come before the contract expires this year after the Ukrainian invasion on August 7 sparked fighting at a gas metering station in Sudzha, near the Russian-Ukrainian border. Natural gas supplies through the Urengoy-Pomary-Uzhhorod pipeline fell by 12 percent, which is worrying because dependence on Russian supplies remains.
The dependency remains
Although more than two years have passed since the war between Moscow and Kiev began, only Slovakia has actively worked to reduce its almost 100 percent dependence on Russian gas. The country’s government is relying on natural gas imports from Poland and Azerbaijan as a substitute.
But Austria’s dependence on Russian supplies was 98 percent last year. The country’s domestic utility companies – many of which are partly owned by municipalities or city administrations – continue to purchase Russian gas, especially since alternatives via Germany are considered more expensive.
In addition, there are legal obstacles to long-term contracts between the Austrian energy group OMV and the Russian group Gazprom, which would be difficult and expensive to terminate, according to a statement. Politico.
Hungary has now loudly declared that it has no intention of reducing its gas imports from Russia. On the contrary, the country is striving to deepen its relations with Russia.
The positions of the three countries may be very different, but in the event of a blackout caused by armed conflict, this will hardly matter. Many are now worried about the knock-on effects of such a scenario.
Fine edges
The three Central European countries import 15 billion cubic metres of natural gas annually, which is about 5% of total European annual imports of about 300 billion cubic metres. Although the continent’s storage capacities are over 90% full, even a small single-digit outage before the approaching winter can have serious consequences.
Patrick Pouyanne, CEO of TotalEnergies, said Reuters He said he was not sure whether Europe would be “fully covered” in the event of such a power outage, “even if the storage tanks are full.”
He also noted that gas markets in Europe will continue to face volatility as there will not be much new supply coming on stream, citing delays in new LNG projects such as Golden Pass in the US.
“So we are still in a phase where we do not have much room for maneuver in terms of energy supply,” he added.
Worryingly, the head of the global supercorporation does not expect the situation to change significantly “before 2027”. No wonder the continent’s most important natural gas contract – the Dutch TTF – remains at around 40 euros (45 dollars) per megawatt hour.
