x Abu Dhabi, UAEFriday 21 July 2017

Worried EU states intervene in gas row

Russia and Ukraine face another day of sparring over gas supplies as two EU states launched fresh diplomacy to end a dispute that has left their economies without Russian gas for one week.

MOSCOW // Russia and Ukraine face another day of sparring over gas supplies and two European Union states launched fresh diplomacy to end a dispute that has left their economies without Russian gas for one week. Russia began pumping gas meant for Europe via Ukraine yesterday but the EU said little or no gas was flowing to countries suffering urgent energy shortages. Russia accused Ukraine of shutting off gas to Europe, but Kiev said there was not enough pressure in the pipeline system.

The crisis has disrupted supplies to some 18 countries at the height of winter, shutting down dozens of factories in south-east Europe. Two of the worst hit EU states, Bulgaria and Slovakia, sent their prime ministers to Moscow and Kiev in a fresh effort to get gas supplies restored. The Slovakian prime minister Robert Fico, who was in Kiev today for talks with the Ukrainian prime minister Yulia Tymoshenko, said the country had 11 days of gas reserves left.

"After 12 days, we will be obliged to resort to measures never seen in our history. May I simply ask how long this will go on?" he told Ms Tymoshenko. But Ms Tymoshenko said her country could do little to help. "Ukraine does not have sufficient gas. We do not have our own supplies," she told Mr Fico. Mr Fico is due in Moscow later to meet the Russian prime minister Vladimir Putin alongside the Bulgarian prime minister Sergei Stanishev and the Moldovan prime minister Zinaida Greceanii.

Mr Stanishev is under pressure to secure supplies for his country of 7.6 million people as limited domestic reserves are dwindling and anger among Bulgarians is mounting against his Socialist-led government. Slovakia, which has a population of 5.4 million and gets almost all its gas from Russia, declared a state of emergency on Jan 6, under which gas deliveries to large clients were reduced. About 1,000 companies were forced to shut or cut production.

A deal brokered by the EU, which gets a quarter of its gas from Russia, had been intended to get supplies moving on Tuesday, with international monitors in place to ensure that Ukraine was not siphoning off any gas, as Moscow has alleged. The Russian state-controlled gas monopoly Gazprom declared force majeure on gas exports to Europe yesterday, meaning circumstances beyond its control prevented it from meeting its obligations to clients.

Gazprom is demanding Kiev hand over $614 million for unpaid gas bills and pay $450 per 1,000 cubic metres of gas in 2009. That is similar to rates paid by EU customers but a big rise on last year's price of $179.5. Analysts in Kiev say Ukraine, saddled with debt and hard hit by the global slowdown, cannot afford that price. *Reuters