The Czech Republic experiences a 75% drop in gas supplies from Russia

Not for the first time, Russia and Ukraine are in dispute about gas supplies. But amidst clashes over unpaid bills, full market values and political enmities between the two countries, Europe too, particularly south-eastern Europe, is beginning to feel the pinch. The Czech Republic on Tuesday also reported a reported 75 percent drop in supplies from Russia. Russian gas transits through Ukraine on its way to Europe, so will Czechs begin to suffer?

Gazprom CEO Alexei Miller, photo: CTK

Gazprom, the Russian gas giant, has reduced gas supplies to Europe by seventy-five percent, according to Naftogaz, a Ukrainian company. In the Czech Republic, this has been confirmed by RWE Transgas, the country’s largest gas provider. The precise reasons for the drop in supplies have not been determined, but many suspect that politics, specifically a multi-faceted dispute between Russia and Ukraine is to blame. In what has become an annual event in the last few years, Russia has accused Ukraine of not paying its bills and from benefiting from below-market rates for the gas it provides. The apparent solution: to cut off or reduce supplies until the situation is resolved. Russia has insisted that Europe will continue to get its gas, but now countries, including the Czech Republic are getting worried:

This is how an RWE Transgas representative Martin Chalupský announced the current situation in a press conference on Tuesday:

“The situation that has caused us to invite you here to RWE Transgas is a serious one because gas supplies from the east were during the night significantly reduced.”

RWE representative Martin Chalupský (left) with RWE board member Tomáš Varcop, photo: CTK

Mr Chalupský also pointed out that the Czech Republic’s secondary gas source from Norway has not been impacted:

“I should also point out that gas supplies from Norway are continuing to be sourced at the full capacity which we have agreed upon. This supply travels south from Norway and we are using this supply to cover the needs of our customers. Further, this morning we also immediately began to source gas from our reserves. At this time, we are fully able to meet the needs of our customers across the Czech Republic.”

So far, there have been no reductions in supplies to customers, and the company insists that it is doing its utmost to maintain supplies, relying on around two billion cubic metres of reserves as well as the Norwegian supply or gas. But with current temperatures meaning a demand of around 50 million cubic metres per day, the loss of supplies from Russia may soon begin to bite. Under ideal circumstances, the Czech Republic sources 70 percent of its supplies from Russia and only 30 percent from Norway. According to RWE Transgas, temperatures would have to consistently fall below -10 degrees Celsius for there to be serious concerns about gas supplies, should the current Russian drop in deliveries continue. And even without Norwegian gas, the company insist it can provide gas for forty days. If the current situation continues, however, some reductions to customers have not been ruled out.

Photo: CTK

I spoke with RWE board member Tomáš Varcop, who assured me that ordinary Czechs remain unaffected by the drop in supplies:

“At the moment, none of our customers are influenced in any way and we are fulfilling all of our contractual obligations and we are taking every measure to continue to do so. There will always be some gas, but in the worst case, we may have to cut supplies to some of our larger customers.”

Meaning that heating for private homes for example, will be the very last thing affected. On Wednesday, the Czech President Václav Klaus is set to meet with the Russian Ambassador to the Czech Republic Alexej Fedotov to try to resolve the dispute – but the bigger picture, namely the conflict between Ukraine and Russia, may be far more difficult to solve.