Austria Energy Regulator expects smooth transition when Ukraine gas deal ends

Austrian energy regulator E-Control says that it should not experience any disruption in supply as it is preparing to switch from eastern natural gas supplies to western alternatives following the expiration of Ukraine's Gazprom contract on Tuesday.

Ukraine announced that it would terminate its gas transit agreement with Gazprom. This month, energy company OMV also ended its agreement with Gazprom after a dispute with the Russian firm.

Markus Krug is the deputy head of E-Control's gas department. He said that the regulator closely followed the events but didn't anticipate any disruptions to gas supply, as Austria had built up its reserves and made provisions for it to be imported from other countries.

Krug said that traders were well-prepared and had already priced the change.

He said that prices could temporarily rise after January 1, but then likely fall again as the market sees things working.

Austria's OMV has said that it will not be affected directly by the termination of Russian Gas transiting through Ukraine.

OMV stated in a statement that the company has taken steps to diversify their supplies so as to serve customers.

Krug noted that Slovakia is being closely monitored and that Russian gas will likely continue to be supplied to Hungary through Turkey.

He estimated that the majority of Slovakia's supply of gas could come from Hungary. About a third would likely come from Austria, and the rest from the Czech Republic or Poland.

Slovakia is arguing with Ukraine about keeping its transit route opened due to concerns over costs and wants to keep its own capacity for transit. The government claims that with the storage capacity and the diversified transit routes in place, the loss of supplies coming from the east won't affect Slovak demand for food. (Reporting and editing by Barbara Lewis; Additional reporting by Jason Hovet)

(source: Reuters)