The Slovenia Times

The Heat is (Still) On



But then, in the wake of the conflict between Russia and the Ukraine over the price of natural gas, came the unwelcome news that our gas supplies may be disrupted, prompting Slovenian distributors of this increasingly important source of energy natural to rethink their import policies. Russia's frosty embrace When Russia's largest company, the state-owned oil and gas giant Gazprom, announced that it was planning a near fivefold increase in the price of natural gas for its Ukrainian customers, Europe's markets hardly stirred. After all, the supply of Russian gas to western European customers - Slovenia included - was guaranteed by long-term contracts that Russia had chosen to honour even during the darkest periods of the Cold War. However, as Ukrainian authorities steadfastly refused to accept the proposed price increase, some observers began to voice concerns as to the security of the Russian gas supplies. Around 80 per cent of Gazprom's gas exports travel through Ukrainian pipelines before reaching customers in the West and when it began trying to force the Ukrainians into accepting the price increase by abruptly cutting off their supply it was hard to expect that Ukrainian authorities would not touch the gas destined for Europe and let their population freeze. No problems in Slovenia In line with these predictions, the pressure in the pipelines - the most reliable indicator of the volume of gas being supplied - promptly started to fall on 2nd January, just one day after the Ukrainian supply was cut off. In Slovenia, the largest natural gas importer and distributor, Geoplin, said that although the supply had dropped by a third, there would be no delivery problems provided that the temperature did not drop below minus six degrees Celsius. Some western European states registered even bigger falls, as much as 50 per cent in a few instances, but unlike Slovenia they had enough reserves at their disposal to make up for the reduced supplies from Russia. According to Geoplin's CEO, Janez Mozina, the biggest users of natural gas in Slovenia are the chemical, paper, iron and pharmaceutical industries as well as local distribution companies. Slovenia imports 1.1 billion cubic metres of gas annually with some 55% or 650 million cubic metres imported from Russia through the Ukraine, Slovakia and Austria, Mr Mozina explained. A further 40% comes from Italy and 5% from Austria, so the country is not wholly dependent on one supplier and therefore the risk of major disturbances to the gas supply is minimised. The company said that as long as any short-term drop in supply did not exceed 30% of the usual levels and weather conditions were favourable, then gas deliveries to its customers should not be affected. EU to the rescue Although natural gas only accounts for about 15 per cent of Slovenia's energy supply, its increasing importance should prompt the government to prepare a mechanism to offset any disturbances to its supply. According to the Slovenian Economics Ministry, if similar disputes arise in the future and last longer - in this instance Russia and Ukraine were able to reach an agreement relatively quickly, then Slovenia's only recourse would be an EU directive governing the reliability of the natural gas supply. Under the directive, which will soon be incorporated into Slovenian legislation, a coordination committee to oversee natural gas distribution would be set up if imports from non-EU countries to the EU dropped by more than 20%. As Slovenia is one of a few European countries without its own gas storage facility, a state-owned power producer is also considering constructing an underground storage facility at a coal mine that is currently in the process of winding down its operations. According to government sources, the proposed facility would help cushion gas supply disturbances. The EUR 30 m investment would be financed from EU development funds and by the state-owned power giant Holding Slovenske Elektrarne (HSE), whose long-term strategy includes increasing its natural gas operations. Thanks to a diversity of energy sources, Slovenia is not as exposed to the whims of Russian pipeline politics as some other western European states. However, as the EU's problems are now also Slovenia's problems, some of us - especially those who depend on natural gas to keep their homes warm - will certainly look apprehensively towards Moscow every winter and wonder what the Russian bear has in store for us.


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