P 071701Z JAN 09
FM AMEMBASSY SARAJEVO
TO SECSTATE WASHDC PRIORITY 9468
INFO EUROPEAN POLITICAL COLLECTIVE
USDOC WASHDC

UNCLAS SARAJEVO 000019 
 
 
DEPARTMENT FOR EUR/SCE, EUR/EX 
 
E.O. 12958: N/A 
TAGS: ECIN KPAO ENRG PGOV PREL SENV AMGTATK BK
SUBJECT: BOSNIA IN THE COLD WITHOUT NATURAL GAS 
 
¶1. Summary:  With only a faxed warning from Gazprom shortly 
before it happened, Bosnia's natural gas supplies were cut 
off yesterday afternoon, joining much of Europe in the cold. 
Because there is only one pipeline into Bosnia from Serbia, 
only about one third of Bosnian households are dependent on 
natural gas, all of which comes from Gazprom.  Nonetheless, 
the impacts on residential customers in Sarajevo, Zvornik, 
Visoko and Zenica and a few key industries such as Mittal 
Steel are significant.  Many can turn to alternative fuels 
for heating for a few days, but, if the cut off persists, 
hardships will deepen as the winter's coldest days coincided 
with the Russian action.  The temperature this morning in 
Sarajevo was a chilly 10F.  Embassy Sarajevo has formed a 
task force to monitor te situation and to oversee actions to 
mitigate the situation for embassy personnel.  Maintenance 
staff worked through the night turning on back-up electric 
systems for embassy households with children.  The chancery 
and annex buildings are operating on fuel oil systems.  End 
summary. 
 
-------------------------------------- 
Not much of a warning and no reserves 
-------------------------------------- 
 
¶2. According to BH Gas General Manager Almir Becarevic, his 
firm received a series of faxes from Gazprom beginning 
yesterday morning January 6 warning that the country's gas 
supply was about to be reduced and finally cut off.  Supplies 
dwindled quickly and by 1530. there was no more gas to be 
distributed.  Bosnia has no natural gas storage capacity and 
when the pipeline stopped flowing, there were no reserves to 
fall back on.  Fortuitously, because there is only one 
pipeline into Bosnia, only about a third of the households in 
the country felt the impact as the bulk of Bosnians still 
rely on coal, wood or fuel oil for heating.  Banja Luka and 
Mostar, for example, are not affected.  (Political disputes 
have blocked planned expansions of natural gas service - 
especially into the Republika Srpska (RS).)  The pipeline 
route is from Belgrade via Zvornik to Sarajevo and then to 
Visoko and Zenica. The main customers are residential users 
in those cities and several key industrial facilities such as 
Mittal Steel and an aluminum plant in Zvornik.  All of those 
industrial facilities are now closed. 
 
¶3. On January 6, ECON Counselor and ECON Specialist met with 
Becarevic who was visibly upset.  He showed us the series of 
faxes leading to the total cut off.  The fax from Russia was 
simply one sentence saying the gas was going to be off. 
Becarevic said that the Bosnian government has sent letters 
today to Russia and the Ukraine protesting the situation and 
that Bosnian Foreign Minister Sven Alkalaj had also protested 
to the Russian Ambassador.  ECONOFF also met with 
Energoinvest Assistant General Manager Ibriham Bosto. 
(Energoinvest not BH Gas is Bosnia's lead negotiator with 
Gazprom.)  He too was completely surprised and upset at the 
Russian cut off.  Tomorrow at 1230 Federation Minister 
Brankovic will hold a second meeting of all concerned 
officials to discuss possible actions that can be taken to 
help citizens through the crisis. 
 
¶3.  Some 130,000 households in the country depend on natural 
gas for heating.  BH Gas serves as the wholesale supplier in 
the Federation.  Distribution company Sarajevogas serves 
70,000 households in Sarajevo.  Sarajevogas Eastern Sarajevo 
serves an additional 3,000 households in Eastern Sarajevo (in 
the RS).  Zvornikstan distributes gas to 2,000 households in 
Zvornik.  In addition, an estimated roughly 80,000 residents 
(20,000 building connections) in Zenica are connected to a 
system that provides heat from the operation of the Mittal 
Steel plant, which is not functioning.  (These numbers are 
all estimates and exact numbers are difficult to determine 
because of variations in building sizes and household sizes - 
one connection to a building might serve 20 apartments, etc.) 
 
--------------------------------------------- - 
Some mitigating circumstances, but it is cold 
--------------------------------------------- - 
 
¶4. A large portion (47,000 apartments) of the natural gas 
households in Sarajevo are served through central heating 
districts run by a company known as Toplane Sarajevo.  When 
the gas crisis became apparent, Toplane switched its source 
of fuel in its plants from natural gas to fuel oil. 
According to press reports, there are, however, only 5 to 10 
days of emergency oil reserves on hand and a prolonged 
natural gas cut off will require more fuel oil supplies.  In 
addition, some 5,180 apartments cannot be served with 
alternative fuels.  Switching to fuel oil also has an 
environmental impact in the city and will make Sarajevo's 
already bad winter air worse. (Many Sarajevo homes still burn 
wood or coal which has very negative impacts on the city's 
air quality - especially when there are temperature 
inversions.)  For that reason, Sarajevo officials initially 
rejected the idea of seeking oil from the Brod refinery in 
the RS because of its high sulfur content.  Bosnian officials 
are seeking additional supplies of fuel oil, but may have to 
turn to Brod as the only source of sufficient fuel. 
Croatian-based INA's local manager for example, told ECON 
Commercial Specialist that they cannot provide extra fuel 
oil.  Zenica Mayor Husain Smajlovic reported to ECON 
Specialist that Zenica is also exploring the possibility of 
using fuel oil to operate the natural gas fired Mittal Steel 
heating system for the residents of the city who depend on 
it.  The Russian timing, however, could not have been worse 
for Bosnians.  The morning temperature in Sarajevo was a 
chilly 10F and even colder weather is forecast for later in 
the week. 
 
--------------------------------- 
Concerns about the electric grid 
--------------------------------- 
 
¶5.  Many Sarajevo residents are turning to electricity as an 
alternate or supplemental source of heat.  (There are even 
press reports of fights breaking out in stores over the 
remaining few electric space heaters for sale last night.) 
Elektroprivreda BiH (EP BiH) Executive Director Emir Aganovic 
told ECON Specialist that he estimates that consumption of 
electricity is currently up by 20 percent.  He is confident 
that EP BiH has the capacity in its generation system to meet 
the demand.  He is prepared for the worst, however, if the 
demand begins to overload the distribution grid, and has 
emergency crews on alert.  The area of highest concern is the 
old city of Sarajevo where the system is very old and 
unreliable and local black outs could easily occur. 
 
----------------------------- 
36 Hours to start it back up 
----------------------------- 
 
¶6.  Sarajevo is at the end of a pipeline system that starts 
in Russia and crosses Ukraine and Serbia.  It will take, 
according to energy experts here, roughly 36 hours for the 
system to reach full pressure in Bosnia once gas begins to 
flow into the pipeline at the Russian end.  Accordingly, even 
a rapid resolution of the ongoing Russian-Ukrainian dispute 
that led to this situation will have a lag time of a day and 
a half here. 
 
--------------------------------- 
Embassy Sarajevo up and running 
--------------------------------- 
 
¶7.  Embassy Sarajevo's chancery buildings are operating on a 
fuel oil system and have a 30-day supply of fuel oil on hand. 
 USAID's building also operates on fuel oil and has a year's 
supply. Since the beginning of the crisis yesterday, Embassy 
facilities maintenance staff have been going to the more than 
100 Embassy family houses and apartments to turn on back-up 
electric heating systems with households with children the 
first priority.  Embassy personnel are monitoring the 
situation in each U.S. direct hire household and in the 
broader American community.  The Embassy has also formed a 
task force to plan contingencies should the crisis be 
prolonged or back-up electrical systems fail.  We have also 
surveyed local staff, some but not all of whom have back-up 
oil heating.  Most though are, thus far, relatively stoic. 
We will hold a town hall meeting Friday to discuss Embassy 
community concerns. 
 
------------------ 
Wartime memories 
------------------ 
 
¶8.  Comment: It is too soon to tell the political, economic, 
environmental and psychological impacts on Bosnia from the 
natural gas cut off.  The shut down of Mittal Steel had other 
major industrial facilities is certainly an economic loss. 
The cost to Bosnia will depend on how long the crisis goes 
on.  Sarajevo residents will be especially concerned as many 
here endured four long winters under siege without heat and 
have not forgotten their suffering.  It is certain, however, 
that Russia has few friends in Sarajevo today.  End comment. 
 
 
ENGLISH