"Hungary is in the middle of an unprecedented situation on the natural gas front, which proves that politicians failed to address dependence on Russian gas properly in the whole of Europe, a gas business expert, speaking on condition of anonymity, told Portfolio.hu on Wednesday. It is virtually impossible to say whether the crisis will last for hours or weeks, he added.“If you're employed in the gas industry you now don't have a minute to waste, phones are ringing constantly; this is total chaos," the expert said. He compared the current situation on the gas front to the craziest stock exchange panics.
The source said the shutting down of the Russian gas flows via Ukraine caught the whole of Europe, but especially Hungary totally unprepared.
“No one would have thought that this would happen again after what went down three years ago. Everyone believed Russia and Ukraine would be able to settle their disputes in a decent manner," he said. If politicians in Europe had handled the dependence on Russian gas as seriously as the issue deserves, the situation would not be remotely as bad as it is now, the source added.
It is impossible to predict how long the gas gap will last, as it depends entirely on how determined Moscow and Kiev are. The reason why local politicians are blowing smoke about how long natural gas reserves could last is because “they don't have a clue", he said.
“Only a handful of people know in Hungary how long the reserves could last. But their knowledge is only theoretical, since it has never happened that the country had to supply consumers from reserves for days. We are sailing on unchartered waters here."
As underground natural gas storage reserves are tapped, the pressure drops every time. This means that the daily extractable volume, which is currently 51 million cubic metres, will shrink by the day.
In comparison, Hungary's daily consumption is around 70 mcm and - thanks to the restrictions implemented - it will be around 64 cmm today. On Tuesday, commercial storage facilities held about three billion cubic metres of gas, plus there are cc. 500 m cmc in two strategic reserves. This implies that supply from storage would be enough for months - disregarding the technical limitations of obtaining gas from the reserve facilities - without limiting household consumption."
Source: Portfolio Online Financial Journal
08.01.2009