| LONDON, March 12
LONDON, March 12 Slovakia is ramping up natural
gas imports from Germany through the Czech Republic to preserve
stockpiles as a buffer against potential disruption to Russian
supplies, raising Slovakian prices above those at rival European
There was a sharp rise in Slovakia's gas imports from
central Europe on Monday just as Ukraine declared it had not
paid debts owed to Russia, escalating fears of a cut-off in
supplies to Europe via Ukraine.
Withdrawals from Slovakian storage sites slowed last week
and ceased entirely over the weekend, data from Gas Storage
Europe showed, as tensions between Russia and Ukraine grew.
Slovakia is not yet rebuilding stocks, but traders said that
higher imports from Germany via the Czech Republic are designed
to substitute winter stock withdrawals and preserve a cushion of
Wholesale gas prices in the European Union member country
are trading at premiums to rival European hubs given the risks
of disruption, traders said.
"We've been sending gas to Slovakia through the Czech
Republic for a couple of weeks now as gas is more expensive
there than in Germany, playing the regional arbitrage," a gas
trader with a German utility said.
"When Ukraine didn't pay its last gas bill to Russia last
Friday, orders for gas from Slovakia in Germany rose as Slovakia
(which borders Ukraine) would be the first to be hit by a cut,"
Another said Slovakia's own gas needs were too low to
explain the surge in cross-border flows and high wholesale gas
Industry sources say the bulk of Germany's gas comes from
Russia via the Nord Stream pipeline, purpose-built to avoid
Ukraine, with the rest coming from Norway and the Netherlands.
Analysts said a short-lived cut of Russian gas supplies to
Ukraine appears likely since Kiev failed to pay its last bill.
A pricing dispute in January 2009 prompted Russian gas
exporter Gazprom to cut off supply to Ukraine which
affected transit supplies to a dozen European countries.
"Gazprom disrupting gas to Ukraine for non-payment of its
gas bills seems an almost inevitable occurrence," Energy Aspects
said in a research note on Wednesday.
Following an unusually mild winter across Europe and a warm
start to spring, regional gas stocks are almost 40 percent, or
10 billion cubic metres, higher than this time last year, when a
long winter almost depleted gas stocks.
(Additional reporting by Michael Kahn in Prague; editing by