Reuters reported that Russian gas export monopoly Gazprom is struggling to meet extra demand from European customers shivering through a severe cold snap, even after ramping up investment and borrowing to boost output.

A company source told Reuters that "Some requests are higher than we can put in the pipe. Requests for gas have been higher for more than a week."

Gazprom supplies around a quarter of Europe's gas and cuts to deliveries in the past, mainly over pricing rows with transit countries such as Ukraine, have raised concerns over the security of supply from Russia.

Gas industry officials in Europe said stored supplies and imports from Russia and Norway were meeting the spike in demand for heating. The cold front has been blamed for more than 40 deaths in Ukraine alone and Moscow is expected to face temperatures averaging minus 20 degrees Celsius for the next 10 days.

Gazprom, which on Wednesday reported a 4% fall in a quarterly profit due to one time foreign exchange losses as it took on debt to finance expansion, said it was honoring long term contracts with European clients after reports of restricted supply.

It added that "Despite increasing gas consumption in Russia due to heavy frosts, Gazprom continues implementing its contractual obligations to European clients."

At the same time, clients in debt stricken Europe are increasingly demanding price cuts in long term supply contracts whose terms are largely indexed to oil prices.

But the Russian monopoly, Russia's top producer, has not agreed to the requests of its major clients, although it agreed to adjust prices for some customers.

(Sourced from www.reuters.com)