MOSCOW: Russia yesterday reduced gas supplies to Europe and trimmed back its oil output because of extreme cold at home, and weather forecasters warned of another deep freeze next week.
Domestic energy supplies were stretched to the limit because Russia - though no stranger to wintry weather - was shivering in a cold snap of the sort meteorologists said normally happens only once in a generation.
Temperatures plunged below minus 30 degrees Celsius (minus 22 Fahrenheit) in central Russia, occasionally dipping below minus 50 degrees Celsius (minus 58 Fahrenheit) in parts of oil-producing Siberia.
Russian gas monopoly Gazprom said it had cut back gas supplies to Hungary and Bosnia-Herzegovina by around 20% to deliver more to domestic users, and may also cut flows to Italy and Austria. Serbia's gas monopoly said Gazprom had warned it would cut deliveries by 25%.
“It is a temporary measure, which is due to soaring consumption here. We are doing our best,” a Gazprom official said.
Gazprom said in a statement Russians were getting 40% more gas while supplies to Europe were 7% above contract obligations, but didn't say whether it was due to increased demand from all customers or some particular states.
Czech supplier RWE Transgas, which also pumps gas on to Germany - Gazprom's biggest customer — said its Russian supplies were unaffected.
Finland's gas import monopoly Gasum and Slovak gas supplier Slovensky Plynarensky Priemysel said pressure in pipes was slightly weaker than normal, but nothing unusual considering cold weather in the countries.
Gazprom is the world's largest gas company and supplies one quarter of Europe's gas needs. It had already briefly reduced supplies to Europe in early January due to a contract dispute with Ukraine, a key transit country for European deliveries.
A second cut in just a month could further damage Gazprom's reputation as a reliable supplier, which many EU states had already questioned during its stand-off with Ukraine.
Yesterday, Ukraine said it was partly responsible for lower Russian supplies to Europe as it was taking more gas after temperatures plunged to about minus 20-30 degrees Celsius.
“Today we have reached agreements with our partners from Gazprom. We have cut shipments to Europe by something like 40mn cubic metres a day,” said Energy Minister Ivan Plachkov.
This is equal to 11% of exports through Ukraine and enough to fully cover daily demand in a country such as Belgium.
Russia pumps about 360mn cubic meters (mcm) a day of gas to Europe via Ukraine and Gazprom had repeatedly accused Kiev of stealing gas at peak periods during past winters.
“I think Gazprom had no other choice but to accept that Ukraine would take more gas as the two sides have just sorted out one crisis and probably don't want to start another,” said a Russian industry source.
Italy said this week it would cut off gas to some industrial clients due to prolonged cold spell of its own but the industry ministry said on Wednesday the country's strong stockpiles would allow it to avoid serious problems for another few weeks.
In Hungary, energy group MOL said that for now the cut in deliveries would not affect gas use by big consumers. But if Gazprom continues to hold back supply and the weather turns colder as forecast for next week, gas use may have to be cut.
The extreme cold has also slowed Russia's oil output by an average 200,000 barrels per day over the past week from the December average of around 9.65mn bpd. Fresh data on Wednesday showed the decline continued this week.
On Tuesday, production fell further to 9.4mn bpd with output declining at almost all major oil firms with facilities in West Siberia, including Lukoil, Rosneft, TNK-BP, Sibneft and Yukos.
Forecasts show the cold spell easing over the next few days, but meteorologists warned that another deep freeze would follow.
“From Jan. 20-21 until Jan. 24 the cold weather will worsen again,” Interfax news agency quoted Yelena Sharun, head of weather forecasting in Russia's oil centre of Tyumen, as saying.
Russia's No 2 oil official Sergei Oganesyan said he still expected oil production to rise by 2% this year. — Reuters