Balkans Get More Heat But Gas Row Hurts Factories

`We have now almost fully restored gas supplies. Households have nothing more to worry about,` said Serbian President Boris Tadic.

Gas heating returned to thousands of homes across the frozen Balkans on Friday but many factories remained crippled by the cut-off of Russian supplies through Ukraine.

Tens of thousands of Serbian homes regained gas heating on Thursday after Germany and Hungary started supplying five million cubic metres of natural gas a day.

Officials said 170,000 Serbian households had no gas heating as of Thursday, but many of those were expected to be back to normal on Friday.

"We have now almost fully restored gas supplies. Households have nothing more to worry about," said Serbian President Boris Tadic, who added that Serbia was seeking more gas from Austria.

Many countries in southeast Europe have been forced to seek gas from elsewhere or draw on their storage reserves after Russia cut off all supplies this week in a dispute over pricing with Ukraine, the key transit route for exports to the region.

Factories received only a small amount of the new supply.

"Thanks to the gas that arrived this morning we managed to avert total disaster at the factory since we have the basic gas to run the heating system so our department for sterilisation is now safe," said Dejan Ivanovic, technical director of Serbian pharmaceutical producer Hemofarm.

This week it was forced to halt production for the first time, a situation unknown even during the 1990s wars, he said.

The domestic situation also improved in Bulgaria, although at least 30,000 households in the northern town of Pleven remained without central heating. At least 65,000 Bulgarian households had been without gas heating on Thursday.

In Bosnia 100,000 households cut off from gas power.

IDLE FACTORIES

Industry across the Balkans has taken the biggest hit.

Bulgaria's state gas monopoly Bulgargaz has completely cut gas flows to 72 big industrial consumers and sharply lowered deliveries to another 153 due to limited domestic reserves.

The Black Sea nation is pumping a maximum 4.2 million cubic metres of gas a day from its sole storage facility, compared with about 12 million of typical daily needs.

Bulgaria relies on gas for less than 10 percent of its energy needs but such gas is crucial in winter. State gas transmission operator Bulgartransgaz said the flow from the storage reserves would start declining in 7-10 days.

Greece and Croatia, also hit by the Russian cut-off, had several weeks of gas reserves.

But Croatia's economy ministry said that from Saturday gas would only be supplied to protected consumers -- households, schools, kindergartens, hospitals and similar institutions.

The government should decide on Saturday whether a winter break for schools will be extended for a week, until Jan. 19.

In Bulgaria, about 57 schools, including 35 in Sofia, were shut because of the cold.

Serbia has no gas reserves at all, which means factories relying on natural gas have been forced to shut. These include U.S. Steel Serbia, a subsidiary of United States Steel <X.N>.

In Bosnia, steelmaker Arcelor Mittal Zenica, a unit of ArcelorMittal <ISPA.AS>, suspended some operations. Other commodity producers in the region, including Macedonia's largest steel exporter, also remained shut.

Electricity use has soared across the region as households switch to electric heaters instead. Some power companies have warned about a possible collapse of the grid.