Tensions between Russia and Ukraine have raised concerns that gas supplies to Europe via pipelines in Ukraine could be affected by the dispute.
On Friday, Russia’s Gazprom said it would end contracts with Ukraine after an arbitration court in Stockholm ordered the Russian company to pay over €2 billion to Ukraine’s Naftogaz, a national energy company, for failing to deliver agreed amounts of “transit gas.”
In a statement on Friday, European Commission Vice President Maros Sefcovic said the dispute “raises concerns not only for the direct supply of natural gas to Ukraine but possibly also for the transit of gas to the EU.” He added that the Commission was “further clarifying the facts” and was prepared to facilitate talks between the two countries.
Gazprom announced on Saturday it had begun the process of terminating its gas supply contracts with Naftogaz. In a phone call between Sefcofic and Russian Energy Minister Alexander Novak, the minister told Sefcofic that until Gazprom and Naftogaz fully terminated their agreement, gas supplies through pipelines in Ukraine would not be at risk.
In a statement following the call, the ministry said, “Mr Novak assured that the gas transit from Russia to Europe is under no threat. The transit remains as reliable as in the past.”
Naftogaz also confirmed gas transit to Europe was currently unaffected by the dispute, saying that that the supply “remains intact,” according to Deutsche Welle.
The news follows a week of extremely cold temperatures in Europe, with parts of the continent colder than the North Pole.
The cold weather prompted concerns of interruptions to the gas supply in parts of Europe even before the latest tensions between Russia and Ukraine. In the UK, for example, gas provider National Grid warned of a possible gas shortage last Thursday, noting that demand was outstripping supply.
The cold spell combined with the political conflict drew fresh attention to Europe’s dependence on Russian gas. Increased demand due to the freezing weather caused spot gas prices to triple, setting a record high and pulling in more gas supplies from Russia.
“Only Gazprom is capable of increasing gas supplies to European customers to maximum levels at a breakneck speed,” Alexey Miller, Gazprom’s chief executive officer, told Bloomberg on Friday. “There’s no other supplier that could cope with the task.”
A third of the EU’s gas supply currently comes from Russia, with significantly higher proportions in some Eastern European countries. Some worry this dependence creates vulnerability. In 2009, a row between Russia and Ukraine resulted in substantial cuts to European gas supplies during the winter.
Several efforts are underway to reduce the EU’s dependence on Russian gas. Last month, Bulgarian Minister of Energy Temenuzhka Petkova said Bulgaria is interested in buying natural gas from two gas fields in Israel. Since Gazprom supplies almost 90% of Bulgaria’s yearly gas consumption, a deal with Israel could significantly diversify the Balkan nation’s energy supply.
Also last month, the European Investment Bank approved a €1.5 billion loan for the Trans-Adriatic Pipeline (TAP). The project, part of the wider Southern Gas Corridor, seeks to improve the security and diversity of the EU’s energy supply by bringing in gas from other regions, particularly the area surrounding the Caspian Sea.