EU drafts emergency ban on gas exports

The European Union could ban gas exports and limit industrial use in emergency measures to protect household energy supplies this winter, a source said, as it braces for a possible halt in Russian gas as a result of the Ukraine crisis.

Russia is Europe's biggest supplier of oil, coal and natural gas, and its pipelines through Ukraine are the subject of political manoeuvring – not for the first time – as Europe and Moscow clash over Russian military action in Ukraine.

While buyers of oil and coal can find new suppliers relatively quickly, southeast Europe receives most of its gas from Kremlin-controlled Gazprom.

Tankers from Qatar and Algeria bring liquefied natural gas (LNG) to Europe via ports along the Atlantic and Mediterranean, but European buyers often resell those cargoes abroad for higher prices rather than supplying their own domestic market.

A source at the EU Commission said that it was considering a ban on the practice of reselling to bolster reserves.

Winter supplies

“In the short-term, we are very worried about winter supplies in southeast Europe,” said the source, who has direct knowledge of the commission’s energy emergency plans.

“Our best hope in case of a cut is emergency measure 994/2010 which could prevent LNG from leaving Europe as well as limit industrial gas use in order to protect households,” the source added.

– (Reuters)