It's getting cold in Europe...

With the Russia-Ukraine gas argument going, it appears that no gas is coming through the southern pipelines anymore. This has significant impact on the Balkans countries, as they depend much on gas for heating.

http://www.sofiaecho.com/article/rus...33896/catid_68
http://news.bbc.co.uk/2/hi/europe/7817043.stm
http://news.yahoo.com/s/nm/20090108/...ia_ukraine_gas

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South-east Europe has borne the brunt of the disruption, but it has affected supplies as far west as France and Germany as Europe faced freezing mid-winter temperatures.

Hundreds of thousands of people across the Balkans went without heating on Thursday and more factories closed. In Turkey, production at three power stations was halted.

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Guess there's not much to do but hope that the weather turns warmer soon. :thumbsdown:

They need to resolve this quickly. Some Baltic states are around 100% dependent on Russian gas.

When we bought our house last year, the guy who sold us the house told us that his father (who was the previous owner) did not change from oil heating to gas heating because he did not believe in reliable gas supply from Russia.

At that point I thought that to be somewhat eccentric - considering the last months (foundation of gas cartel, now this) I do not think that gas heating will be our primary choice when we install a new heating in the next two years...

Has anyone else noticed that it's Ukraine, not Russia, who are screwing up the gas?

Makes me feel a little better about paying so much for the oil heating here.

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Originally Posted by Husar

Makes me feel a little better about paying so much for the oil heating here.

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We used to have cheap electricity here.....


walks away mumbling and grumbling about privatization and other rubbish instead of derailing the thread further..

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Originally Posted by HoreTore

Has anyone else noticed that it's Ukraine, not Russia, who are screwing up the gas?

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It appears that the "blame question" is still subject of debates.
However, in this thread nobody seems to have put the blame on either of the invollved parties so far.

Ukraine does seem to expect Russia to subsidise it - even as it turns its back on Russia.

Russia isn't a particularly friendly country. The UK and Russia have not been great friends for over 100 years. Today it is Ukraine's doing. But What if Russia one day decides that it wants to double prices overnight? Europe can freeze or pay.

Importing fuel from another country isn't a bad idea. Getting all one's power needs is.

The most frustrating thing is that this has happened not that many years ago.
I don't really care where the energy comes from: geothermal plants in Iceland, solar power plants in turkey, Wind, Wave, coal or nuclear - but the underlying feature should either be a plurality of sources.

~:smoking:

Russia as a supplier is by default responsible for honoring its deal with Europe. If Ukraine isn't cooperating, that is not Europe's problem, it's Russia's problem and they should deal with it even if it means building a new gas pipeline that would skirt around Ukraine.

Nope. Russia has no obligations, as it is Ukraine who has contractual obligations to ship the gas through.

If Europe was in a stronger bargaining position they could stipulate demands, but as it is we've no choice.

There is a new pipeline being built to Germany BTW. These things do take time to build.

~:smoking:

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Originally Posted by rory_20_uk

Nope. Russia has no obligations, as it is Ukraine who has contractual obligations to ship the gas through.

If Europe was in a stronger bargaining position they could stipulate demands, but as it is we've no choice.

There is a new pipeline being built to Germany BTW. These things do take time to build.

~:smoking:

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Ukraine didn't cut the supply though, Russia did.

The deal is a little more complicated. Ukraine pays 1/3 of the market price for gas. Russia wants market price eventually, also influenced by the orange revolution obviously. Russian position is, why should we subsidize your economy while you turn your back on us and seek Nato membership, let them subsidize you. Ukraine maintains that market price would ruin Ukranian economy. So the price is increased gradually and it is always a mess. Gazprom wanted about half of the market price, 250, while Ukraine said 201 is the top price they will pay. After some time, Russians basically said **** you, we want full market price - 450. Ukraine refused, Russia stops all gas intended for Ukraine. After that Russia says Ukraine is siphoning the gas intended for EU and after Ukraine refused to let Gazprom monitors check the situation, closes all valves until the supposed siphoning stops.

Russia also asked for independent monitors from EU but Ukraine initially refused. After some pressure it appears that EU monitors will go to Ukraine. Negotiations are in place and it is expected that everything will return to normal in a day or two. If it doesn't, we may have a disaster here in the Balkans. Most western Europeans have reserves for weeks, even months, but Balkan countries don't. All gas shipments in Serbia through Ukraine stopped. Our German and Hungarians friends allowed us to have a portion of what goes through other pipelines but that's a very short term solution. If this last more than a couple of days, we're in trouble. Bosnia is in even worse situation. Croatia a bit better, they produce 2/3 of the gas they need, but Bosnia is 100% dependent of Russian gas and Serbia about 84%....

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Originally Posted by rvg

Russia as a supplier is by default responsible for honoring its deal with Europe. If Ukraine isn't cooperating, that is not Europe's problem, it's Russia's problem and they should deal with it even if it means building a new gas pipeline that would skirt around Ukraine.

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No enforcing authority can require Russia to honor its contracts if it does not wish to do so. Russia presumes that this embargo will put more pressure on Ukraine than Russia. Maybe so.

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Originally Posted by Sarmatian

The deal is a little more complicated. Ukraine pays 1/3 of the market price for gas. Russia wants market price eventually, also influenced by the orange revolution obviously. Russian position is, why should we subsidize your economy while you turn your back on us and seek Nato membership, let them subsidize you. Ukraine maintains that market price would ruin Ukranian economy. So the price is increased gradually and it is always a mess. Gazprom wanted about half of the market price, 250, while Ukraine said 201 is the top price they will pay. After some time, Russians basically said **** you, we want full market price - 450. Ukraine refused, Russia stops all gas intended for Ukraine. After that Russia says Ukraine is siphoning the gas intended for EU and after Ukraine refused to let Gazprom monitors check the situation, closes all valves until the supposed siphoning stops.

Russia also asked for independent monitors from EU but Ukraine initially refused. After some pressure it appears that EU monitors will go to Ukraine. Negotiations are in place and it is expected that everything will return to normal in a day or two. If it doesn't, we may have a disaster here in the Balkans. Most western Europeans have reserves for weeks, even months, but Balkan countries don't. All gas shipments in Serbia through Ukraine stopped. Our German and Hungarians friends allowed us to have a portion of what goes through other pipelines but that's a very short term solution. If this last more than a couple of days, we're in trouble. Bosnia is in even worse situation. Croatia a bit better, they produce 2/3 of the gas they need, but Bosnia is 100% dependent of Russian gas and Serbia about 84%....

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Where are you getting this information? I believe you, but I'm just curious. I haven't read in depth enough (yet).

Leave it to the russians to keep things interesting, gonna buy me an extra pair of socks! :beam:

Its actually warmer then usual in the far east (Asia)

Dont know why though

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Originally Posted by Alexanderofmacedon

Where are you getting this information? I believe you, but I'm just curious. I haven't read in depth enough (yet).

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All sources really, TV, newspapers, internet. There's a wiki article about it, although it's the short version. Serbia signed a deal with Russia recently that involves selling them 51% Serbian national oil and gas company, South Stream pipeline deal and building a huge storage for gas in Serbia. There was a pretty heated discussion about it in the parliament so we were bombarded with information for several weeks, like how much they will pay, what's the price of gas, how much they pay Ukraine for transit etc etc...

It seems that the deal will be made soon. It is unclear whether only EU observers will be present in Ukraine or both EU and Russian. Russia wants her own observers there, too, although I don't think it's gonna be a stumbling block. It's in the interest of both sides that gas flow is not disrupted so there's no reason not to trust each other...

Here in Italy, officials said they would seek to increase the flow from alternative sources. Russia is Italy's second-biggest gas supplier, after Algeria. Our minister for economic development said that there will be no worries for some weeks...

Both Russia and EU signed the deal, it's still unclear about Ukranian signature. Under that agreement, there will be representatives from all EU countries, all the companies that buy Russian gas, Ukranian Naftogaz, representatives from Russian and Ukranian government, experts from various European countries and some international organizations. Observers will be placed in both Russia and Ukraine.

According to Czech prime minister Topolanek, a verbal agreement has been made with Ukraine as Ms. Tymoshenko promised that Ukraine will sign the deal, although it is still not clear about Ukrainian president Yuschenko. Some have suggested that this may be some kind of political struggle between him and prime minister Tymoshenko. Russian president Medvedev said that gas flow will not continue until Ukraine signs the document. When/if Ukraine signs, it will take about 3 days for gas to reach European countries...

I could give the link, but it's in Serbian so there's not much point...

Also, Hungarian gas distributor Emfesz filed a suit against Ukranian Naftogaz

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Originally Posted by Guildenstern

Here in Italy, officials said they would seek to increase the flow from alternative sources. Russia is Italy's second-biggest gas supplier, after Algeria. Our minister for economic development said that there will be no worries for some weeks...

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Just the other day on Portuguese news radio the idea was brought up that Portugal should team up with Spain and turn the Iberian Peninsula into an entry point of gas into the european continent.....just have it brought liquified in ships to our ports and distribute from here.

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Originally Posted by Ronin

Just the other day on Portuguese news radio the idea was brought up that Portugal should team up with Spain and turn the Iberian Peninsula into an entry point of gas into the european continent.....just have it brought liquified in ships to our ports and distribute from here.

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This sounds good. We all see the urgent need for Europe to reduce its dependency on Russian supply. Russian Gazprom cut off Ukraine in the middle of winter for the second time in three years over the annual contract dispute. It is clear that the European continent remains too vulnerable, also considering that it receives a fifth of its gas from pipelines crossing Ukraine. Russia and Ukraine should reach a long-term agreement in order to end the regular rows over payments. Commercial disputes should not be allowed to affect Europe's gas supplies, but I believe that payments are only part of the problem.

Russia has had three years to come up with an arrangement with Ukraine and of course they could have at any time in the summer not supplied the gas. Every year, they choose Jan. 1 to sharpen up the issue. This tells us that politics are at the basis of the Russian gas supply crisis. Every year, Putin sees how far the European Union lets him play his policy out regarding Ukraine ... And every year, Europeans are reinforced in their desire to diversify away from their increasing dependency on Russian gas. There is no doubt that Russia sees its position as the world's largest gas exporter as a powerful political tool.

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Originally Posted by 187Beefyz

Its actually warmer then usual in the far east (Asia)

Dont know why though

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Because their gas isn't being cut off. :beam:

I've often wondered about this entire issue. On the surface, I find my sympathies lie, suprisingly, with Russia and Gazprom. But I'm curious as to the level of confidence and trust the EU is placing in Russia in entrusting its energy policy to a nation with newly restated imperialistic aims that has frequently used the flow of gas as a tool of intimidation.

I don't begrudge the Russians the right to use their gas to their best advantage. I question the EU leadership that's going to load a revolver, hold it to their heads, and let Putin hold the trigger. As Rory said, diversity in the energy markets is the key, whether it be dealing with oil barons at Exxon-Mobil or gas-barons at Gazprom. As long as you have only one option, you have none.

EU countries would like nothing more than to diversify their supply but they can't, that's the issue. Plans for Nabucco exist for a long time now but there isn't enough gas to fill it up. Russia secured the deals with most ex-USSR countries about gas. The only country left in the near vicinity of Europe that has huge amounts of gas, or better to say enough to be a reliable long-term supplier, is Iran.

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Originally Posted by Sarmatian

The only country left in the near vicinity of Europe that has huge amounts of gas, or better to say enough to be a reliable long-term supplier, is Iran.

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The distribution of Iran gas to Europe remains a big problem. There is no doubt that the transport of Iranian natural gas to Europe through Turkey would provide an attractive alternative to European reliance on Russian supplies. But such a deal would certainly also undermine US efforts to isolate Iran's oil and gas economy. As a matter of fact, although Iran and Europe hold a mutual attraction over their natural gas interests, the US is still opposed to the trans-Turkey gas sales. The US remains determined to curtail investment in Iran and Europe interests are tempered by US efforts to isolate Iran from the international community. Maybe things will change with Obama...

My thermometer showed 23 today...global warming is our friend :elephant::whip:

Seriously now, alternative sources are not the solution because frankly they go through or originate of inherently unstable countries (Algeria, Iran, Ukraine etc.)...

...its time we use the sun and the wind. Simple and can be diversified.

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Originally Posted by Guildenstern

The distribution of Iran gas to Europe remains a big problem. There is no doubt that the transport of Iranian natural gas to Europe through Turkey would provide an attractive alternative to European reliance on Russian supplies. But such a deal would certainly also undermine US efforts to isolate Iran's oil and gas economy. As a matter of fact, although Iran and Europe hold a mutual attraction over their natural gas interests, the US is still opposed to the trans-Turkey gas sales. The US remains determined to curtail investment in Iran and Europe interests are tempered by US efforts to isolate Iran from the international community. Maybe things will change with Obama...

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Yes, EU efforts for Iranian gas are seriously hampered by the US, although even that wouldn't eliminate the need for Russian gas. Economic crisis aside, eastern European countries are experiencing a huge growth and the EU demand for gas will rise dramatically in the following years. So even with the Iranian gas, Russia would remain main gas supplier to the EU.

Some good things that may come out of this gas row as Gazprom and other big European gas companies will try to accelerate building of alternative pipelines, namely Nord and South Stream, which go around Ukraine...

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Originally Posted by Sarmatian

Yes, EU efforts for Iranian gas are seriously hampered by the US, although even that wouldn't eliminate the need for Russian gas. Economic crisis aside, eastern European countries are experiencing a huge growth and the EU demand for gas will rise dramatically in the following years. So even with the Iranian gas, Russia would remain main gas supplier to the EU.

Some good things that may come out of this gas row as Gazprom and other big European gas companies will try to accelerate building of alternative pipelines, namely Nord and South Stream, which go around Ukraine...

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Uhm.... Saudi Arabia has some gas, don't they?

Anyway, we're self-supplied up here in the cold north :smash:

And we run on hydro-electricity anyway....

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Originally Posted by HoreTore

Uhm.... Saudi Arabia has some gas, don't they?

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Some, yes...

Proven reserves bn m3
World 175,400

1) Russia 47,570
2) Iran 26,370
3) Qatar 25,790
4) Saudi Arabia 6,568
5) United Arab Emirates 5,823
6) United States 5,551
7) Nigeria 5,015
8) Algeria 4,359
9) Venezuela 4,112
10) European Union 3,310

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Originally Posted by HoreTore

Anyway, we're self-supplied up here in the cold north :smash:

And we run on hydro-electricity anyway....

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You guys have pretty much everything up there, except nice weather :egypt:

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Originally Posted by Sarmatian

10) European Union 3,310

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Interesting. That must be in Strasbourg. :evil:

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Originally Posted by Sarmatian

Some good things that may come out of this gas row as Gazprom and other big European gas companies will try to accelerate building of alternative pipelines, namely Nord and South Stream, which go around Ukraine...

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I read that the South Stream pipeline would go from the Russian Black Sea coast across the seabed to Bulgaria, there to bifurcate into a southern branch toward Greece and Italy and a northern branch toward Serbia, Hungary, and Austria. In addition, Russia has proposed to extend this structure to many other countries along those routes.

Now, even if the South Stream project implies the diversion of significant gas volumes from Ukrainian pipelines, I think it is very difficult for Gazprom to satisfy all those potential customer countries along South Stream routes. There are prospects of important gas shortfalls for Russia, relative to its multiple, and growing, internal and external supply commitments from a stagnant production. Shortfalls are expected right when the South Stream becomes operational. After two decades of underinvestment in exploration and production (while over investing in other areas), Gazprom can only hope for large-scale production from new fields in Yamal (Siberia) in the latter part of the next decade. :thumbsdown:

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Originally Posted by Guildenstern

I read that the South Stream pipeline would go from the Russian Black Sea coast across the seabed to Bulgaria, there to bifurcate into a southern branch toward Greece and Italy and a northern branch toward Serbia, Hungary, and Austria. In addition, Russia has proposed to extend this structure to many other countries along those routes.

Now, even if the South Stream project implies the diversion of significant gas volumes from Ukrainian pipelines, I think it is very difficult for Gazprom to satisfy all those potential customer countries along South Stream routes. There are prospects of important gas shortfalls for Russia, relative to its multiple, and growing, internal and external supply commitments from a stagnant production. Shortfalls are expected right when the South Stream becomes operational. After two decades of underinvestment in exploration and production (while over investing in other areas), Gazprom can only hope for large-scale production from new fields in Yamal (Siberia) in the latter part of the next decade. :thumbsdown:

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That's about right, although Italy will have two entry points. One from the south, from Greece and the other one will go through Slovenia to northern Italy.

It won't be just Russian gas, it will be also gas from several countries around Caspian Lake. I don't expect project to be finished before 2012-13 and then it'll take several years to build it. I think it will be finished in the latter part of the next decade, 2015-2020, somewhere in that period.

It isn't overly important how many countries will there be connected in the South Stream. Balkan countries are small in population and their economies are also small, they're not going to consume much gas. Even if you put Croatia, Bosnia, Macedonia, whatever-Balkan-country it won't change things so much. Germany consumes more gas than all Balkan countries put together. The only large consumer would be Italy, which also import gas from other sources...

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Originally Posted by Sarmatian

Balkan countries are small in population and their economies are also small, they're not going to consume much gas.

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True. Also I (and other Greeks) have this aversion of things that go ffffffsss and them booooom after an earthquake (since we experience one almost every other Tuesday)...

...I dont think it will ever enjoy widespread domestic use here...

...gas is only good for frying mussels!

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Originally Posted by Sarmatian

It won't be just Russian gas, it will be also gas from several countries around Caspian Lake. I don't expect project to be finished before 2012-13 and then it'll take several years to build it. I think it will be finished in the latter part of the next decade, 2015-2020, somewhere in that period.

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Actually, I don't rely on the South Stream project very much. I very much doubt the whole thing. As far as I know, Gazprom has yet to show even a pre-feasibility study for South Stream, clarify its proposed routes, and prove that it can fill the South Stream pipeline to the planned capacity.

The South Stream project seems to me like a political and strategic bluff. I think it tries to hamper the carrying out of the EU-planned, US-backed Nabucco route for Caspian gas to Europe, largely duplicating that itinerary, so as to discourage investment in that project. I really hope the Nabucco structure will be built ahead of South Stream because it would represent a valid alternative to Russian gas for Europe.

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Originally Posted by Guildenstern

Actually, I don't rely on the South Stream project very much. I very much doubt the whole thing. As far as I know, Gazprom has yet to show even a pre-feasibility study for South Stream, clarify its proposed routes, and prove that it can fill the South Stream pipeline to the planned capacity.

The South Stream project seems to me like a political and strategic bluff. I think it tries to hamper the carrying out of the EU-planned, US-backed Nabucco route for Caspian gas to Europe, largely duplicating that itinerary, so as to discourage investment in that project. I really hope the Nabucco structure will be built ahead of South Stream because it would represent a valid alternative to Russian gas for Europe.

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The project is in the infant stage, true, with this crisis not helping. Apart from that, there are many other issues. The deal involves many countries. Bulgaria signed in January last year and the definite deal with Serbia was signed only a couple of months ago.

South Stream isn't going to be built by Gazprom alone - it's a 50/50 joint investment between Gazprom and Eni. Feasibility study is being done by Eni and is supposed to be completed in 2009. There are still several options open concerning route, true.

Nabucco, on the other hand, is dead. It was never more than an idea, and those countries whose gas was supposed to transported by Nabucco are going to sell their gas through Russia. The only other option is Iran, but as you've said, daddy from Washington told Europeans not even to think in that direction...