Ukraine Gas Official: Talks To Resume

KIEV, Ukraine -- Ukraine and Russia will hold new talks to end their bitter natural gas dispute that has cut off Russian gas to six other countries, the head of Ukraine's gas company said Tuesday, as officials in eastern Europe warned of a looming emergency.

Gazprom ready to resume gas talks with Ukraine.

Bulgaria, which gets almost all its gas from Russia, said it would seek the reopening of a nuclear power facility as two cities were left without gas.

Naftogaz head Oleh Dubina said he would travel to Moscow on Thursday. He said he made the decision after speaking to Alexei Miller, chief executive of Russia's Gazprom.

There was no immediate comment from Gazprom, a state-controlled monopoly gas supplier.

Ukraine and Russia are locked in a dispute over pricing and overdue payments, and Russia cut Ukraine off on Jan. 1 but had promised to keep gas moving to Europe.

The energy dispute sharply escalated Tuesday when countries on the other end of the pipeline network running from Russian through Ukraine reported a complete shutoff.

Bulgaria, Greece, Macedonia, Romania, Croatia and Turkey all reported a halt in gas shipments. Croatia said it was temporarily reducing supplies to industrial customers and Bulgaria said it had enough gas for only "for a few days."

Dimitar Gogov, head of Bulgarian pipeline operator Bulgargaz, said reserves were sufficient to cover the industry's needs "for a few days" while President Georgi Parvanov on Tuesday said Bulgaria should start immediate preparations to relaunch Unit 3 of the Kozlodui nuclear power plant.

Two 440-megawatt reactors were shut down on Jan. 1, 2007, under an agreement with the European Union. But Parvanov said they could be restarted under terms of Bulgaria's EU accession treaty, which says closed reactors could be used temporarily in the event of an acute energy shortage.

Parvanov said one of the reactors could be opened within one month. Kozlodui currently operates two reactors.

"We are facing a serious natural gas crisis in which Bulgaria is a victim of the conflict between Russia and Ukraine," Prime Minister Sergei Stanishev told reporters after an emergency Cabinet meeting.

Two cities in eastern Bulgaria, Varna and Dobrich, have been left without natural gas supplies. In Varna, on the Black Sea coast, the shortage left 12,000 households without central heating amid freezing temperatures, authorities said.

During a similar dispute between Ukraine and Russia in 2006, which lasted just three days, several West European countries saw their gas supplies drop by 30 percent or more. That crisis led to criticism of Russia as an unreliable energy partner and spurred talk of finding ways to diversify Europe's energy supply.

Other countries lost significant amounts of gas as well. Austria lost 90 percent of its Russian gas, which is about half its total supply. It said it had three month's reserves but called an emergency meeting at its Economy Ministry.

Slovakia Economy Minister Lubomir Jahnatek said gas importer SPP AS would declare a state of emergency Tuesday after its gas deliveries from Russia were down by 70 percent.

The aim of the measure is "to notify customers that a gradual limitation of deliveries to big customers could occur," Jahnatek said. He said households, hospitals and schools should not be affected.

The European Union in Brussels called the sudden cutoff to some of its member countries "completely unacceptable."

In a strongly worded statement, the EU complained that gas had been cut "without prior warning and in clear contradiction with the reassurances given by the highest Russian and Ukrainian authorities to the European Union."

Up to Monday, the EU has said that the dispute would not affect consumers in the coming weeks. The sudden drop Tuesday, however, increased the diplomatic pressure to find a solution.

Gazprom said it was sure that it will be able to provide Europe with enough gas "We are confident that we will be able to get through this situation without any damage to the gas production and transit system," deputy chairman Alexander Medvedev was quoted as saying by RIA-Novosti. "The only issue is gas transit to Europe through Ukraine."

Moscow and Kiev blamed each other. Ukraine's state gas company Naftogaz said Russia's gas giant Gazprom had sharply reduced its shipments to Europe through pipelines crossing Ukraine, triggering the cuts.

"Our Russian partners are playing cat and mouse with us," said Oleksandr Shlapak, economic adviser to Ukraine's president. "These actions today can lead to serious problems not only for the Ukrainian but also for the European gas transport systems."

The Croatian economics ministry reported that gas shipments from Russia via Austria and Slovenia had ceased and said it has introduced temporary measures to reduce gas supplies to industrial consumers to "a necessary minimum." It has also called on citizens to "rationally" use gas in their homes.

Romania's gas transport company Transgaz said Ukraine ceased pumping gas at 3 a.m. (GMT 0100) Tuesday.

Turkey's Energy Minister Hilmi Guler confirmed the cutoff and said the country was trying to compensate with supplies from other sources including another Russian pipeline beneath the Black Sea.

The Czech Republic and Hungary reported partial supply drops. The Czech gas company RWE Transgas said it expects to get only 25 percent of the gas it was supposed to get Tuesday, while Hungary predicted its cut would be greater than the 20 percent it saw the day before.

Poland said it was considering limits on deliveries to heavy industry, even though so far Russia has compensated for shortfalls through Ukraine by shipping extra gas to Poland through a pipeline in Belarus.

Late Monday, Gazprom said it would cut the amount of gas it ships to Europe through Ukraine by 65.3 million cubic meters, or about 20 percent — the amount it accuses Ukraine of diverting from its transit pipeline network over recent days.

Russia supplies Europe with about a quarter of its gas, 80 percent of which is shipped through Ukraine.

Kiev denies allegations it is stealing gas, saying it is diverting only the Russian-supplied gas it needs to run its pipelines, including the compressor stations that pump gas west.

Source: AP

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