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Gas industry

EU Prepares for Potential Gas Supply Disruption

Strategic Insights

— 1 min read

The European Commission, the executive arm of the European Union, is taking steps to mitigate a potential disruption to natural gas supplies from Russia. The move comes after a dispute between Russia and Ukraine over gas prices, with Gazprom threatening to cut off supplies to Ukraine from January 1 unless Kiev agrees to buy the gas at market price. The EU buys 25% of its gas supplies from Russia, with most of this transported through Ukrainian pipelines. The Commission is concerned but remains confident that an agreement will be reached between the parties and that gas supplies to European markets will continue as usual.

Key Takeaways:

  • The European Commission is calling a meeting of member states' energy officials to discuss the gas supply situation of the 25-nation bloc next Wednesday.
  • The EU buys 25% of its gas supplies from Russia's state-owned gas company Gazprom, with most transported through Ukrainian pipelines.
  • Gazprom has threatened to cut off gas supplies to Ukraine from January 1 unless Kiev agrees to buy the gas at market price, which is three times higher than the present level.
  • Commissioner for Energy Andris Piebalgs feels it is still necessary to call a meeting of the Gas Coordination Group to "deal with all eventualities".
  • The meeting of the Gas Supply Group will enable the Commission to discuss the appropriate European response to the potential disruption.
  • The Commission is confident that there is no risk of a gas shortage in the short term, even if a limited part of European supplies were to be interrupted.
  • The EU has adequate gas stocks and supplies from other areas to compensate for any potential disruption.

Statistics:

  • 25%: The percentage of EU gas supplies that come from Russia.
  • 3: The factor by which Gazprom wants to increase the gas price for Ukraine.
  • 25: The number of nations in the European Union.
  • 100% : The current level of gas supplies transported through Ukrainian pipelines from Russia.

Sources:

  • Xinhua News Agency, Brussels, Dec 30, 2005

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