Gas supply from Austrian gas hub back to normal after deadly blast

VIENNA (Reuters) - The operator of Austria’s main pipeline hub focussed on Wednesday on finding the cause for a deadly blast after successfully bringing gas supplies to neighbouring countries back to normal.

A column of fire is seen after an explosion ripped through Austria's main gas pipeline hub in Baumgarten, Austria December 12, 2017 in this picture obtained from social media. TOMAS HULIK/via REUTERS

Gas prices across Europe fell. They had soared on Tuesday as the explosion at the Baumgarten site triggered supply worries.

The hub in eastern Austria is a major regional transfer node, taking gas from as far away as Russia and pumping it towards neighbours including Italy - its biggest recipient - as well as Germany, Hungary, Slovenia and Croatia.

Russia pointed to Tuesday's accident as underlining the need for its own Gazprom GAZP.MM gas projects to proceed.

Currently one third of Russian natural gas is transported via the Baumgarten hub, according to operating company Gas Connect Austria.

The amount of damage was not clear, a spokesman for Gas Austria Connect said, adding he did not know what claims if any, would be made against his company.

“We are back in normal operation,” the spokesman said. “Now we are turning our attention to finding the cause of the incident and assessing what has to be done next (to repair the site).”

Technicians, insurance specialists, criminal investigators and other experts were on site to assess the situation.

Flows from Russia to Italy resumed on Tuesday night after the explosion, in which one person was killed and 21 were injured, led Italy to declare a state of emergency on Tuesday.

On Wednesday, the Italian wholesale day-ahead price was, with bids at 23.60 and asks at 28.50, valued at around 26 euros/megawatt hour according to a Thomson Reuters composite of prices, a 65 percent drop on the previous day’s settlement price.

The price soared 215 percent to 75 euros/MWh following the blast.

Italy's January gas contract TRITPSVMc1 traded 3.5 percent lower at 23.15 euros/ megawatt hour at 1430 GMT.

The British wholesale gas price for day-ahead delivery TRGBNBPWKD was down 9.6 percent at 66 pence per therm.


In response to the outage, the Kremlin pushed its Gazprom GZAVI.MM plans.

“Of course this accident shows how important sustainable supplies of natural gas and energy resources (are) to Europe and how acute is the issue of sustainability of the whole (energy) system functioning,” spokesman Dmitry Peskov told a regular conference call.

The Russian energy group, which redirected its gas flows on Tuesday after the incident in Austria, plans to build a new pipeline to pump natural gas to Germany through the Baltic Sea, bypassing existing land routes over Ukraine, Poland and Belarus.

European Union executives see Russia’s plan as undercutting EU efforts to reduce dependence on Moscow.

Ukraine resumed the transit of Russian gas to European consumers at normal volumes after a 23 percent fall caused by the explosion.

Slovakia also confirmed that gas supplies from the Austrian hub had returned back to normal.

The cause of the explosion could have been a technical fault of the filter system, the Gas Connect Austria spokesman said.

Work was carried out on the filter system on Monday, and staff from the licensing authority TUV Austria was on site for a technical certification at the time of the blast, he said.

He was informed that the person killed was a TUV employee. TUV Austria declined to comment.

Two independent probes, one internal by Gas Connect and one by Lower Austria’s criminal police, were being conducted.

Reporting by Kirsti Knolle, additional reporting by Alexandra Schwarz-Goerlich in VIENNA, Stephen Jewkes in MILAN, Pavel Polityuk in KIEV, Dmitry Solovyov in MOSCOW, Tatiana Jancarikova in BRATISLAVA; Editing by Ludwig Burger/Jeremy Gaunt