European gas stocks enough to survive without Russian supplies for a year – OECD
For Germany, Italy and Poland gas imports from Russia provide about 10 percent of their energy demand, the Organization for Economic Cooperation and Development (OECD) said Tuesday.
A possible shortage of gas from Russia to Europe through Ukraine will not substantially affect the price in the short term as the current level of stocks in European underground storage would cover the deficit for a year, OECD says.
Europe has about 130 billion cubic meters of stored gas ready fill any gap in Russian supplies.
However, OECD analysts say that if the disruption lasts longer than a year, the price of gas in some European countries would most likely rise.
According to the independent Bruegel think tank, this will boost the move to alternative energy sources; change the balance of energy provision, and lower power consumption. The deficit will partly be offset by more expensive LNG supplies and the replacement of gas with oil in the production of electricity and heating.
Even though Europe will be able to compensate for the shortage of gas, a lack of infrastructure for imports (LNG terminals or pipelines) could cause problems in some countries, and high gas prices can greatly affect certain industries.
Russia, Ukraine and the European Commission in late October agreed the so-called winter gas plan. It assumes the resumption of Russian gas supplies to Ukraine on condition of prepayment, the repayment of a multibillion dollar debt, and the guarantee of uninterrupted transit to Europe.
About half the supplies currently running through Ukraine could be sent via alternative pipelines not working at full capacity. In 2012, 50% of gas exports from Russia to Europe went through Ukraine, or 15% of the European gas imports.