Deadly blast at Austrian pipeline hub slashes gas flow to Italy

VIENNA/LONDON: An explosion and fire that ripped through Austria’s main gas pipeline hub on Tuesday killed one person and injured 21 others, prompting Italy to declare a state of emergency as flows from the strategic site were cut off.

The Baumgarten site in eastern Austria, near Slovakia, is a major regional transfer node, taking natural gas from as far away as Russia and pumping it towards neighbours including Germany and Italy, its biggest recipient.

News of the blast sent gas prices in Europe soaring on fears it would restrict supply as winter sets in.

Gas Connect Austria, which operates the site, said the hub had been shut down but the blaze had been extinguished. The cause appeared to be a technical fault, it said.

“An explosion occurred this morning before 9:00 a.m. (0800 GMT) on the grounds of the Baumgarten Natural Gas Station,” the company said. “The explosion caused a serious fire that has been contained to several small fires.”

Footage on social and other media showed a column of fire in the distance rising from a flat landscape. A wide area around the site was cordoned off and 250 firefighters were at the scene.

The emergency services said one person was killed and 21 injured, one seriously. Among the slightly wounded were “employees of contractors from six other countries” apart from Austria, the operator said, without elaborating.

Gas Connect Austria said its deliveries to Austria’s southern and southeastern borders were affected by the blast until further notice. Those pipelines supply Hungary, Slovenia and Croatia but also Baumgarten’s biggest recipient, Italy.

That dependence on its gas led Italy to declare a state of emergency on Tuesday as its industry minister said the country had a “serious” energy supply problem.

A state of emergency would give Rome the right to use a series of extraordinary measures such as allowing coal and oil power plants to fire at full blast.

The Italian wholesale day-ahead price surged 215 percent to 75 euros per megawatt-hour, its highest recorded level.

RESUMPTION EFFORTS

Italian gas transport group Snam, however, sounded optimistic of a return to normal soon.

“On the basis of the information currently available, supplies could resume today if the first indications on the absence of damage to transport infrastructure are confirmed,” it said.

Gas Connect Austria said the part of the site affected by the fire was only 100 metres (330 feet) by 100 metres at a site that covers 17 hectares (42 acres), but it could not say how important that part was or how long it would take to bring the site back online before an inspection by experts on Tuesday.

The blaze has exacerbated concerns in Europe about tight gas supply after several nuclear reactor and gas infrastructure outages and the shutdown of the Forties North Sea pipeline, during a period of high demand due to freezing temperatures.

Analysts believe, however, that there is enough storage to cope with supply for the time being.

“But if supply does not resume soon and the cold weather continues, prices will remain strong through the winter,” Wood Mackenzie analyst Massimo Di-Odoardo said. “We might well see some competition between Europe and Asia to attract LNG (liquid natural gas, delivered by ship) this winter.”

Slovakia’s main gas transit route to Austria was suspended after the fire, Slovak pipeline operator Eustream said. Russia’s Gazprom Export said it was working on redirecting gas flows and trying to secure uninterrupted supplies to clients.

In Britain, Europe’s biggest gas market, the price of gas for immediate delivery reached its highest level since 2013.

A UK National Grid spokesman said there was sufficient gas supply to meet demand amid multiple outages, underlining the breadth of concern about supply after the Baumgarten blast.