GAS DISPUTE

JANUARY 5 2009 13:33h

Germany Unaffected By Gas Row -Ministry, Companies

The arrow of a pressure gauge points to zero at an Ukrainian gas compressor station in the village of Boyarka

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Market leader E.ON Ruhrgas said there were no reductions in the volumes being received on Monday.

The German government and major gas companies in Europe's biggest economy said on Monday a deepening dispute between Moscow and Kiev was not yet straining their natural gas supply.

Russia cut off supplies to Ukraine on Jan. 1 over debts, pledging supplies to western Europe would be safeguarded, but some eastern European countries are beginning to see incoming gas volumes fall, mainly due to system imbalances.

Market leader E.ON Ruhrgas said there were no reductions in the volumes being received on Monday.

"There are no effects on the supply to our customers," said a spokesman from Essen, also pointing to high storage levels and alternative suppliers such as the Netherlands and Norway.

Echoing this, a Kassel-based spokesman for German-Russian joint venture Wingas, a unit of chemicals company BASF, said, ""Currently we are receiving all the contractual volumes."

A spokesman for the Economics Ministry in Berlin said at a news conference that all ordered volumes were being received.

Germany uses some 950 terawatt hours (TWh) of gas per year for industry and home heating, of which it imports 85 percent.

In the year to October 2008, Russia supplied 44 percent of the German import total, latest official data show.

RWE Midstream, the German utility group's procurement and logistics arm and the domestic number three in gas, agreed with the two others.

"Speaking today, we don't expect major shortfalls, bear in mind that German storage facilities can supply up to a quarter of necessary supplies," said a spokesman.

In a separate comment on developments sparked by the conflict, a spokesman for the Nord Stream pipeline project, which plans to bring gas from Russia to Germany from 2011 via a subsea link, said his company's efforts to supply higher volumes in the long run now seemed more than justified.

"But in concrete terms it makes them neither easier nor more difficult," he added.

Commentators have highlighted the merits of the Russian/European joint venture, which is headquartered in Zug in Switzerland. It aims at bypassing Ukraine, but has been slowed by opposition from EU member states around the Baltic Sea.

The planned detour for the gas was being welcomed in the light of the latest events, said the spokesman.

"But unfortunately, the row also serves those seeking diversification away from Russia as a fresh argument that gas offers itself to being used for political purposes," he added.