Italy expects less Russian gas, taps other sources

(Updates with Gazprom, industry minister, Eni)

ROME, Jan 6 (Reuters) - Russia's Gazprom (GAZP.MM) can only guarantee gas supplies to Italy of 7 million cubic metres on Tuesday, or less than 20 percent of the expected amount, an Italian source close to the matter said on Tuesday.

However, Industry Minister Claudio Scajola said he was not worried about supplies, adding he had signed a decree on Tuesday to increase imports from other suppliers after Russian gas flows to southeastern Europe were halted.

Scajola said in a statement gas stocks topped 90 percent of the maximum capacity, ensuring Italy had reserves for "several weeks".

He added that Rome was increasing imports from Libya, the Netherlands, Norway, Algeria and Britain.

In a few weeks, a regassification plant at Rovigo, in northern Italy, will also start pumping liquefied natural gas (LNG) imported in tankers from Qatar that will cover 10 percent of Italy's consumption once it reached full capacity, Scajola said.

Italy imports around 60 million cubic metres a day of gas from Russia but Tuesday is a public holiday, meaning gas consumption for the day is lower than usual. However the country is experiencing a cold snap likely to drive up gas demand.

Scajola said a special committee monitoring gas supplies would meet soon to assess whether emergency measures were needed.

In Milan, Eni SpA (ENI.MI) Chief Executive Paolo Scaroni met managers to weigh the situation, a source close to the oil and gas company said.

Bosnia gas operator says Russian supplies halved

SARAJEVO (Reuters) - Bosnia's main gas operator BH Gas said on Tuesday that deliveries of Russian gas to Bosnia had been halved because of the gas row between Russia and Ukraine.

"The situation with the gas is further getting complicated as imports were reduced by 50 percent at 1228 local time (10:20 a.m. British time)," the company said in a statement.

BH Gas General Manager Almir Becarevic said Bosnia has no gas reserves and urged consumers to hold back consumption.

"We warn all consumers to use the gas rationally and to switch to liquid fuels to secure enough gas supplies for those who have no alternative energy sources," he told Reuters.

The country uses around 350 million cubic metres of gas a year and imports all gas needs from Russia via Ukraine, Hungary and Serbia.

Industry accounts for around 50 percent of gas consumption and the remainder goes to households, Becarevic said, adding that the natural gas accounts for up to eight percent of the Balkan country's energy resources.

Russian Gas Supplies To Romania Still 30% Short - Transgaz

BUCHAREST (AFP)--Deliveries of Russian gas to Romania were still 30% short of the planned volume after Russian gas group OAO Gazprom (GAZP.RS) said it would reduce supplies, the company handling the flow of gas said on Monday.

"The fall of 30% in gas deliveries is continuing," the director of the gas transit company Transgaz, Ioan Rusu, told AFP.

The reduction, noticed since late Friday, was expected to continue until Jan. 11, he said, on the basis of information provided about the movement of gas to the Balkans by Gazprom.

"The contract foresees that the quantities of gas may vary, in the event of difficult weather conditions or technical problems, and it is quite possible that after Jan. 11 the deliveries will rise to compensate for the reduction noted during this period," Rusu said.

Before this problem, Romania imported about 10 million cubic meters of gas a day from Russia. It consumes about 58 million cubic meters of gas a day.

The country has 2.2 billion cubic meters of gas in storage and the authorities have given assurances that households won't be affected by the reduction of imported gas.

Meanwhile, many industrial users of gas are working at a reduced rate because orders have fallen owing to the economic slowdown.

As a precautionary measure, the oil company Petrom (SNP.RO), part of the OMV AG group, has decided to close the Doljchim chemical complex in Craiova in the south of the country, releasing 1.2 million cubic meters of gas a day.

Romania shares a frontier with Ukraine. On Jan. 1, Russia ceased supplying Ukraine with gas over a disagreement on the price for gas in 2009 and on back payments, and several countries have since noticed that supplies have been affected.

Gazprom Dispute With Ukraine Entangles Europe

PARIS — Russia’s gas price dispute with Ukraine escalated Tuesday, disrupting deliveries to the European Union in the midst of a bitter cold spell, with a number of countries reporting that gas supplies had been suspended or reduced, and Germany predicting a possible shortage.

Bulgaria, Romania, Greece, the Czech Republic, Austria and other countries including Croatia, Macedonia and Turkey reported that gas supplies had been suspended or reduced after Gazprom, the Russian gas monopoly, reduced gas shipments through Ukraine.

Aleksandr I. Medvedev, a deputy chief executive of Gazprom, said at a news conference in London that three export pipelines within Ukraine had been shut down early Tuesday morning.

“The flow to Europe through the Ukraine is now about seven times less than the norm and the situation continues to deteriorate,” Mr. Medvedev said. “The Ukraine is in obvious breach of its commitments.”

“We face this challenge together with our European colleagues,” he added. “It’s a question of absolute irresponsibility,” and he called on the European Union to “go after Ukraine.”

Nonetheless, he said, Gazprom is “ready to go to the negotiation table any day, any minute.”

The European Commission and the European Union presidency responded to the Russian move with a statement demanding that “gas supplies be restored immediately to the E.U. and that the two parties resume negotiations at once with a view to a definitive settlement of their bilateral commercial dispute.” They said the E.U. would seek to “intensify the dialogue with both parties so that they can reach an agreement swiftly.”

E.ON Ruhrgas, the German gas company, said its gas supplies via Ukraine at its Waidhaus station had been “massively reduced,” and predicted that deliveries would completely stop in the next few days. E.ON said it would soon be unable to meet demand if supplies were not restored and temperatures remained low.

The Bulgarian Energy Ministry said that its deliveries were suspended early Tuesday, including gas intended for transit to Turkey, Greece and Macedonia. Bulgaria gets the vast majority of its gas from Russia. Bulgarian leaders announced that natural gas supplies would be slashed by two thirds on Tuesday, forcing the nation to rely on reserves in the village of Chiren in central Bulgaria that could last up to two months.

Prime Minister Sergey Stanishev said that the storage facility had reserves of 570 million cubic meters of gas and could provide about 4.5 million cubic meters daily — about a third of the country’s normal consumption.

The Turkish energy minister, Hilmi Guler, on Tuesday told reporters in Ankara that the Russian gas from a pipeline that transits Ukraine had been completely cut. But Turkey is seeking to increase deliveries of Russian gas via a Black Sea pipeline, he said.

In Prague, the Czech pipeline operator RWE Transgas said the flow of gas “delivered by the transit pipe line system through the Ukraine and Slovakia to the Czech republic and other EU countries has dropped significantly.” It said it would increase purchases of Norwegian gas delivered via another pipeline.

The Romanian Economy Ministry also released a statement saying that a pipeline delivering Gazprom gas had been shut down. A second pipeline in the north of the country continues to operate, however. In Vienna, the Austrian energy company OMV said its supply of Russian gas via Gazprom was down 90 percent Tuesday. Werner Auli, a member of the OMV board said in a statement: “The supply of natural gas to our customers is still secured for the time being.”

Gazprom began reducing deliveries Monday for transit through Ukraine to Western European customers, saying it was seeking to make up for gas stolen by Ukraine. The Gazprom chief executive, Aleksei B. Miller, said in a conversation with Prime Minister Vladimir V. Putin broadcast Monday on Russian state television that Gazprom would reduce exports bound for Western Europe through Ukrainian pipes by the same amount that it accused Ukraine of diverting. Gazprom had already cut off all fuel supplies meant for Ukraine over the dispute.

It said that any countries that suffer shortages as a result should blame Ukraine for not paying a fair price for Russia’s natural gas. Russia and Ukraine, which has a pro-Western government, have been haggling over gas prices for years, in disputes that often carry political overtones. In the current fracas, Ukraine resisted an increase in Russian gas to $250 per 1,000 cubic meters from the current $179.50. Russia then raised the price to $418 for the same volume and again to $450.