EU Suffers Gas Shortfall As Russia, Ukraine Trade Accusations

MOSCOW, Russia -- EU fears of a drop in vital gas supplies became a reality after Russia accused Ukraine of "stealing" from European customers and Brussels issued an urgent demand for contracts to be honoured.

Meanwhile, Russian energy giant Gazprom can no longer depend on Ukraine as a transit route to get gas to Europe and is looking at alternatives, the firm's deputy chief executive told the BBC.

The EU's brand new Czech presidency was forced to issue a late-night call Friday for the "immediate resumption" of full gas supplies following falls in deliveries to Poland and Hungary, with the European Commission saying the latter was down 25 percent.

The Russian accusation -- which followed the New Year's Day cutting of supplies for the Ukrainian market in a row over unpaid fines and levies imposed by Moscow -- had prompted a sharp denial by Kiev, which said it was dipping into its own reserves to honour obligations to the EU.

"The European Union calls for an urgent solution to the commercial dispute on gas supplies from the Russian Federation to Ukraine, and for an immediate resumption of full deliveries of gas to the EU member states," the EU presidency said in a statement.

Gas shortages occurred in Europe after a similar 2006 dispute.

"Energy relations between the EU and its neighbours should be based on reliability and predictability. Existing commitments to supply and transit have to be honoured under all circumstances," it added.

The commission said that it had received reports from Hungary and Poland of "irregularities in gas received through the Ukrainian gas pipelines."

Hungary has seen a drop of around 10 million cubic meters, almost a quarter of the contracted supply, although Poland's national gas distributor Gaz-System said a six percent fall there was being compensated by increased deliveries of Russian gas via Belarus.

Brussels did not apportion blame for the supply drop.

European Union states depend on Russian gas, much of which flows through Ukraine via a Soviet-built pipeline network.

Prague earlier proposed setting up independent monitoring stations on the Ukrainian-Russian and Ukrainian-Polish borders.

Both sides in what Czech Prime Minister Mirek Topolanek termed a "commercial dispute" have sent delegations to Prague and other European capitals to put their case before EU politicians.

Deputy ambassadors from across the EU are also to discuss the crisis in Brussels on Monday.

Gazprom deputy chief executive Alexander Medvedev told the BBC: "We believe it's necessary to develop, as soon as possible, alternative transit routes and we hope that Europe will make any necessary steps to support the realisation of this project."

Medvedev, who was speaking in London, has embarked on a tour of European capitals to win support in the Ukraine gas crisis.

Medvedev denied that Gazprom was deliberately picking a fight with Ukraine, saying it was ready to talk but there was nobody to negotiate with in Kiev.

Gazprom currently has two new gas pipelines under construction -- the Nord Stream pipeline, which will run from Russia's Baltic port of Vyborg to Greifswald in northern Germany, and the South Stream, which will cross the Black Sea into Bulgaria and then split, going to Austria and also Greece.

In televised comments, a spokesman for Gazprom, Sergei Kupriyanov, asserted: "The Ukrainian side openly admits it is stealing gas and has no shame about it."

He put the amount of gas he said had been illegally "siphoned" from pipelines crossing Ukrainian territory at 21 million cubic metres since Thursday.

He added that Ukraine was refusing to permit Russia to send the full amount of gas required for clients in Europe across Ukrainian territory on Saturday.

Russian Deputy Foreign Minister Alexander Grushko said Moscow wanted to put its case before an emergency session of the European parliament "to give the Russian side a chance to express its views."

But Ukrainian state energy company Naftogaz denied Gazprom's accusations and said Russia had reduced the amount it was sending through Ukraine.

"We haven't received 17 million cubic metres of gas that was due," Naftogaz spokesman Valentin Zemlyansky told AFP, explaining that Ukraine had added 10 million cubic metres of its own gas to deliveries to Europe.

"We are not stealing gas," he said.

While both sides have voiced willingness to negotiate, Gazprom's chief executive Alexei Miller has scotched hopes of a quick deal , saying Ukraine would have to pay a "European price" of 418 dollars per 1,000 cubic metres of gas in 2009, more than double what it paid last year.

Gazprom is demanding payment by Ukraine of over two billion dollars, for gas supplied in November and December as well as fines for late payment.

Experts say both Ukraine -- which wants EU integration -- and the European Union are cushioned by large gas reserves they have built up in storage facilities.

Around a quarter of the gas used in the EU -- more than 40 percent of the bloc's imports -- comes from Russia, most of it pumped in pipelines through Ukraine.

Source: AFP


Lowell said…
Wow! This was totally predictable. It is almost exactly the same thing that happened before. I knew Russia would blame Ukraine as before. Do they not understand the definition of insanity (continuing to do the same thing over and over again...and expecting different results)? Putin and Medvedev thought they were kings of the mountain until the price of oil crashed under them. Now they sound just like what they were in the first place, a couple of school yard bullies who are trying desparately to hang onto what little power and money they have left. Only the people of Russia and Ukraine will suffer because of the stupidity of governments.