ERR in Brussels: Estonia Very Vulnerable to Gas Supply Disruptions, Says EU Stress Test (2)

Natural gas pipes. Photo is illustrative. (AFP/Scanpix)
10/17/2014 10:28 AM
Category: Economy

A European Commission "stress test" report says that if Russia were to completely halt gas imports to the EU, more gas will continue to be delivered to homes and companies - if member states cooperate - even in the case of a prolonged six-month disruption. Estonia, however, is among the most vulnerable EU member states.

The report published on Thursday presents the results of a modeling exercise conducted by 38 European countries, including EU member states and neighboring countries. It analyzes different scenarios, in particular a complete halt of Russian gas imports into the EU for a period of six months.

A prolonged supply disruption would have a substantial impact in the EU, with member states in the East and the Energy Community countries (mostly located in Southeast Europe) being affected the most.

Finland, Estonia, the Former Yugoslav Republic of Macedonia (FYROM), Bosnia and Herzegovina, and Serbia would miss at least 60 percent of the gas they need. This means that even private households could be left out in the cold.

Marlene Holzner, spokesperson of the Vice-President of the European Commission, responsible for Energy, Günther Oettinger, told ETV's "Aktuaalne Kaamera": "Estonia, if there is no cooperation and every member state just looks at its own board and customers, would be the only country in the European Union where it is not guaranteed that all the private households would have gas for this very long period of six months."

The analysis found that in the case of a severe disruption of gas supplies from Russia, there would be no gas in the Estonian gas system, including for protected customers, within 4-5 days. Transmission of gas from storage in Latvia must be arranged in this short period of time.

Latvian reserves, in turn, can be supplied through Klaipeda LGN terminal in Lithuania. This would rise the prices but avoid a large-scale gas shortage in the region.

"First of all, you should make sure that you have an agreement with the LNG terminal in Klaipeda, so that you can have access to their liquefied gas. Secondly, make sure that you find a political agreement for the new regional terminal. And thirdly, it would be good to have a joint emergency plan with your neighbors," Holzner said.

In addition, the report said Estonia should increase its reserves of alternative fuels. In Finland such stores cover several months, allowing operators time to arrange additional deliveries in case of need. In Estonia, however, they suffice for only 72 hours.

Alternative fuels include, for example, heating oil, which would guarantee the continued use of heating units. Although in Brussels the stress test scenarios are generally believed to be unlikely, Vladimir Putin has recently threatened to reduce gas supply if Ukraine uses the gas meant for Europe to fulfill its own needs.

The Commission recommends that Estonia finalizes the agreement with Lithuania before December 2015, ensures the feasibility of fuel switching during emergencies and increase the alternative fuel stocks. Estonia and Finland should also press on with building regional LNG terminals and the Balticonnector pipeline to connect them.

The European Commission failed to back a joint LNG terminals project by Alexela Energia and Finnish energy company Gasum this month. Estonian Prime Minister Taavi Rõivas said the LNG project will nevertheless continue.

The Ministry of Economic Affairs and Communication said that such recommendations were expected.


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