Russian gas returns to Europe

Russian gas returns to Europe

Gas transit through the Baumgarten hub in Austria has been restored, the director of the Gas Connect Austria operator, Harald Stindl, said.

"I can report that yesterday we managed to restore all the transit lines until midnight, they all operate 100 percent," ORF radio cited Stindl as saying.

The operator said that the explosion was probably caused by a technical failure.

"The exact cause of the explosion is not yet established, but all the circumstances indicate to a technical malfunction. Authorized experts of Gas Connect Austria are intensively working to find out the reasons," the press service noted. 

There was a powerful explosion at a gas distribution station belonging to the Austrian oil and gas company OMV on December 12, killing one person and injuring 20 more. The incident affected the largest Austrian gas terminal, which is engaged in the distribution of Russian gas in Europe. The operator of the Gas Connect Austria terminal manually disconnected the gas pipeline.

The executive vice-president of NewTech Services, professor of the Gubkin Russian State University of Oil and Gas, Valery Bessel, speaking with a correspondent of Vestnik Kavkaza, noted that the Baumgarten hub accident does not create risks for future Russian gas supplies to Europe. "On the contrary, the accident will trigger resolving the issue of diversification of gas supply. If at the initial stage of capital accumulation no one wanted to spend money on diversifying gas supplies, because it is expensive. But now everyone is thinking about it, because the old gas pipeline systems and gas distribution stations are getting old. The accident is the fault of the Austrian colleagues, because the ignition and explosion of gas-air mixtures means a leakage of gas into the air, which shouldn't have happened. Now everyone will start to think how to diversify gas supplies, especially to the south of Europe," he expects.

According to the expert, this strengthens the position of the Turkish Stream-2. "The fact is that the Turkish Stream-2 will turn Turkey into a gas distribution hub for the countries of Southern Europe, which will be very profitable for Ankara. I recall that the gas pipelines from Iran and Azerbaijan go through Turkey, so the project of turning the republic into a new center distribution of gas for European consumers in the implementation of the Turkish Stream-2 has a very good future. While Russia remains the most reliable gas supplier: our gas is cheap, supplies are stable and there are no risks of instability. Our European colleagues should seriously think about how to deliver our gas to them, this is their task," Valery Bessel pointed out.

Assessing the possible risks that may result from the accident, Sberbank CIB analyst Valery Nesterov noted that along with the need to increase the energy security of the region, this incident can serve as an impetus for the further construction of interregional and interstate gas pipelines. "First, for Europe, this is an incident that will prompt politicians and governments to pay attention to increasing the energy security of the region, in particular, the security of gas supplies," he said.

The expert drew attention to the fact that the downside of such a situation could be the accelerated promotion of liquefied natural gas (LNG) to European markets. "LNG will partially replace the pipeline gas in any case. Of course, LNG significantly increases both energy security and flexibility of gas supplies," the analyst said, recalling that LNG terminals were recently built in Italy, Turkey and other countries.

The expert drew attention to the benefits for Gazprom. "This is an additional need for Gazprom's gas to replenish those stocks that are currently in operation. So I think that Gazprom will make record gas deliveries to Europe this year," the expert suggested, adding that the volume would be approximately 190 billion cubic metres.

Sberbank CIB analyst also pointed out that this situation will become an additional argument in favor of the construction of the second thread of the Turkish Stream. "The implementation of this project will increase the energy security of Southern Europe," Valery Nesterov believes.