Gazprom said Monday it had restored supplies of Russian natural gas to Europe in full, after several European countries reported cuts in supplies in early February as freezing weather from Russia to Western Europe drove up gas demand.
"I am pleased to announce that Gazprom Group has restored in full natural gas supplies to cover demand of European customers, which soared to extreme heights across the continent in February 2012 due to the unprecedented cold snap," Gazprom's deputy CEO Alexander Medvedev said in a statement.
Medvedev provided no figures.
At least eight EU countries, including Italy, France, Germany and Austria, were affected by a cut in Russian gas supplies to the EU in early February as cold weather hit Europe.
At the time, Gazprom said it was exporting gas to Europe at maximum capacity, and said it was not contractually obliged to send additional volumes to meet extra requests.
Medvedev also criticized Europe's policy of moving away from long-term contracts to develop spot markets.
The February freeze highlighted "the gradual build-up of a systemic problem in the current gas industry," Medvedev said.
"Politically motivated decisions are breaking the mechanism of mutual commitments and long-term stability, while offering as a substitute reliance on immature, illiquid and fragmented markets which are fundamentally incapable of solving even short-term problems in the current state of play on the gas market in continental Europe," he said.
"The signals coming from EU governing bodies during the last several years, and also the gas market reforms undertaken by them, made demand forecasts vague. As a consequence, these factors hampered investment by producers, mainly in the upstream natural gas sector," Medvedev said.
He said not only Russia but other gas suppliers, including Norway and Algeria, encountered difficulties in meeting soaring gas demand in Europe due to abnormally low temperatures in early February.
The recent imbalance on the market was "yet further proof that spot markets are not playing the determining but the balancing role in continental Europe," Medvedev said.
At the beginning of February, even on the spot markets -- where there was no liquidity of gas -- prices went up by 60%, he said.
"It means that gas-indexed prices might make gas trade stability a hostage to market speculation," he added.
European consumers have long been seeking to increase the share of gas they purchase from Gazprom at spot prices as well as reduce gas prices under long-term contracts, which are indexed to the price of oil, to bring them closer to lower spot prices.
Gazprom, however, has repeatedly said it believes long-term, oil-indexed gas contracts should remain the core element of gas supplies to provide stability both of supply and demand.
