BLAST AT GAS PLANT HEIGHTENS WINTER CHILL IN EUROPE AS SUPPLIES FALTER
▶ Explosion in Austria leaves one dead and dozens injured while consumers in UK and Italy brace for price rises
An explosion yesterday morning at a gas installation in Austria killed one person and threatened to plunge European energy networks into chaos at one of the heaviest periods of demand in the year.
Italy’s economic development ministry declared a state of emergency after the country’s Russian gas imports were temporarily cut off, and energy prices in the United Kingdom surged.
Social media footage showed a raging fire, but terrorism has apparently been ruled out as a possible cause of the blast. Gas Connect Austria, which operates the Baumgarten site in the east of the country, said the fire had been brought under control and police said that the cause was technical in origin.
“There was an explosion around 8.45am and a fire,” a police spokesman said.
“A wide area has been sealed off and there are expected to be several injured.”
The local fire brigade confirmed there had been a fatality and that 18 people had been injured, one seriously.
Elena Menasse, a representative of OMV, the company that owns the plant, said: “We can confirm there’s been an explosion ... on the grounds of Baumgarten natural gas station. Gas Connect Austria is the operator, and OMV’s stake is 51 per cent.
“There’s been an explosion and there’s been serious fire, which has been contained to a few small fires and now the fires have already stopped.”
Gas prices began soaring as soon as news of the incident emerged, with same-day gas rates in the UK up 40 per cent to 95p (Dh4.65) per therm, its highest price in four years.
Front-month deals, futures contracts that fall due in January, rose almost 25 per cent.
The Italian day-ahead price surged 87 per cent to €44.50 (Dh192) per megawatt-hour.
The Baumgarten hub, a facility 50 kilometres north-east of Vienna and close to the Austrian border with Slovakia, handles about 40 billion cubic metres a year – almost 10 per cent of the gas used across Europe. OMV is a quarter owned by Abu Dhabi’s Mubadala Investment Company, and earlier this year signed a deal with Adnoc that covered co-operation on new downstream projects, refining operations, refinery-petrochemical integration and optimisation, and technical and maintenance support. The plant was opened in 1959 on the site of a spent gas field and began transporting flows from Russia, Europe’s biggest gas supplier, nine years later.
Russian energy giant Gazprom said yesterday it was “working on redistribution of gas flows” and doing “its best to secure uninterrupted gas supplies to the clients on this transport direction”.
Immediately after the explosion, Italy’s imports of gas through the Tarvisio-Malborghetto pipeline were halted, leading to the announcement of a state of emergency.
Storage facilities were covering half the country’s domestic demand according to Snam, the Italian natural gas infrastructure company.
“On the basis of the information available, supplies could resume today if the first indications on the absence of damage to transport infrastructure are confirmed. In the meantime, the security of the Italian system is guaranteed by the storage facilities made available by Snam,” it said.
The UK is likely to be heavily affected by the perfect storm of a cold snap, disruption to supplies from the North Sea and the closure of the country’s largest storage facility.
Prices had been rising on Monday after a hairline crack in a pipeline halted production from gas fields that used the Forties pipeline network. That network’s Norwegian manager said yesterday flows would be trimmed from Troll, Europe’s largest offshore gas field.
Compounding the problem for the UK is a harsh start to winter, with temperatures well below their usual range. Monday night was the coldest of the year.
To make matters worse, the Rough natural gas storage facility, a depleted gas field 18 miles off the coast of Yorkshire, was closed this year. Rough carried up to 10 per cent of peak winter gas demand.
To make up the shortfall caused by the Baumgarten incident, Britain may require liquefied natural gas supplies to be delivered by tankers; but it takes about 14 days to take LNG from Qatar, the UK’s primary supplier, and there is only one scheduled delivery for this month. Another option would be to import from Russia’s Arctic plant Yamal LNG, which could arrive in five days.
European consumers were reminded of the fragility of winter gas supplies and human cost of industrial accidents