Eastern Europe Suffers Gas Shortage as Leaders Travel to Moscow

By Amanda Jordan

Jan. 14 (Bloomberg) -- Eastern European nations faced further natural-gas shortages today as leaders from Bulgaria, Slovakia and Moldova traveled to Moscow to discuss the eight-day supply disruption with Prime Minister Vladimir Putin.

Moldovan Prime Minister Zinaida Greceanii joined her Bulgarian and Slovak counterparts, Sergei Stanishev and Robert Fico, in a meeting with Putin today.

Russia and Ukraine have blamed each other for the failure to reopen pipelines and restore gas deliveries to the European Union. Exporter OAO Gazprom said NAK Naftogaz Ukrainy, Ukraine’s state-run energy company, is blocking transit shipments from Russia, while Naftogaz said the pipeline network lacks sufficient pressure to transport fuel without endangering domestic supplies.

Slovakia, which relies solely on gas via Ukraine, is using imports and backup generators to avoid a blackout following the supply cut and an unplanned halt at a coal-fed power station. Ukrainian Prime Minister Yulia Timoshenko today rejected Fico’s request to deliver gas to Slovakia from storage, saying Ukraine can hardly meet domestic demand.

Bulgaria, which lost its only source of gas when supplies through Ukraine halted, has slashed daily consumption by more than half, using gas from reserves to meet demand. The country has shut 72 factories and rationed gas for heating utilities and 150 other companies. Moldova has also imposed curbs on gas use.

Accusations

Russia stopped flows through Ukraine on Jan. 7 after negotiations over a supply deal broke down. Russia complained that its western neighbor was diverting gas bound for Europe and had closed down its pipelines, charges denied by Ukraine.

The cutoff has renewed calls for the EU to diversify its sources of energy away from Russia. Negotiations between Russia and Ukraine over the separate issue of gas prices and transit fees remain stalled.

Hungary, which borders Ukraine and relies on Russia for about 80 percent of its gas, has sufficient supplies to meet expected consumption today, according to Mol Nyrt.’s network operator, FGSZ Zrt.

The central European country expects to use as much as 62 million cubic meters today, FGSZ said in an e-mailed statement. Available supplies, including commercial reserves and imports via Austria, total 66 million cubic meters. Hungary is keeping a ban on gas use for companies using more than 2,500 cubic meters a day.

Neighboring Croatia gets about 40 percent of its gas from Russia. Croatian industry is suffering increasing losses because of the dispute, Jutarnji List reported today, citing Vladimir Kovacevic, an official at the country’s employers group.

Serbian Losses

Balkan neighbor Serbia has been relying on imports from Hungary, Austria and Germany during the gas crisis. Serbian companies have reported losses of as much as 1.5 billion dinars ($21.6 million) as a result of the shortage in supplies, the Serbian Association of Employers said yesterday on Radio Beograd.

Slovenia is managing to keep supplies to companies and households “stable” by using alternative sources, gas distributor Geoplin d.o.o. said today in an e-mailed statement.

To contact the reporter on this story: Amanda Jordan in London at ajordan11@bloomberg.net