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. Last Updated: 07/27/2016

Cold Renews Worries About Supply

Ukraine said on Friday that winter cold had forced it to tap more Russian gas from pipelines heading west across its territory, threatening further shortages for European customers of gas giant Gazprom.

With temperatures well below minus 20 C in Moscow, Kiev and Riga, and with an even deeper freeze in Gazprom's production heartland, the gas firm's ability to keep all its customers warm has been tested.

And icy air from Russia is set to sweep over northwestern Europe, increasing demand for heating fuel.

Gazprom says it is pumping gas at full capacity and meeting its contractual obligations.

Ukrainian Fuel and Energy Minister Ivan Plachkov said Gazprom had agreed to let Ukraine take extra gas and to reduce transit to Europe by 60 million cubic meters per day, up from the previous 40 bcm.

"With the agreement of our Russian colleagues, volumes of Russian gas supplies for exports were cut to 325.4 million cubic meters per day from 385 million -- by 60 million cubic meters per day," Plachkov said at a government meeting.

But he said Gazprom was covering this amount with gas from its reserves in storage in Western Europe.

Gazprom had already briefly reduced supplies to Europe in early January due to a contract dispute with Ukraine. A second cut in just a month could further damage Gazprom's reputation as a reliable supplier, which many EU states had questioned during its standoff with Ukraine.

In Austria, the head of top utility Verbund said he was confident Russia would keep the gas flowing to Europe.

Croatia also found supplies were flowing more strongly. "Gas supply from Russia has improved today, and reduction fell to four percent from yesterday's 11 percent. We expect no disruptions in distribution," said an official at Ina Naftaplin, the gas arm of Croatian oil concern Ina.

But in Bosnia, main gas distributor BH Gas said the situation was critical because Russian imports were still down 25 percent. As in Hungary, large consumers have switched to using oil.

Hungary's MOL also said Russian gas imports were still down by 20 to 25 percent, and Germany's leading gas supplier said there had been no reduction in supply since the early January problem.

 Italian gas company Eni said it was getting less fuel than it requested from Russia for a fifth day, Bloomberg reported Sunday.

Eni failed to get 6.8 percent of the gas it requested from Gazprom in the 24-hour period ending Sunday morning, the Rome-based company said in a statement. Gazprom did not deliver 5 million cubic meters out of the 74 million requested, Eni said.