EU says no sign when Russia gas will resume

18th January 2009, Comments 0 comments

Moscow and Kiev have said they will sign an agreement Monday on the conditions for deliveries of gas to Ukraine and the transit of gas to Europe.

Brussels -- The European Union said Sunday that only a real resumption of Russian natural gas to Europe was acceptable to the bloc despite a new accord between Russia and Ukraine.

Moscow and Kiev have said they will sign an agreement Monday on the conditions for deliveries of gas to Ukraine and the transit of gas to Europe, the Ukrainian government said Sunday.

Czech Industry Minister Martin Riman, whose government holds the EU presidency, welcomed the deal but said it was not clear when gas supplies to Europe would resume.

"We welcome the progress achieved in the talks between the representatives of the Russian Federation and Ukraine announced this morning in Moscow," Riman said in a statement.

"However, we remain realistic. Over the past few days we have seen several similarly hopeful moments. The only thing that counts for the EU is the resumption of gas supplies. For the time being it is not clear when this resumption takes place."

In comments aired on Czech public television, Riman said he was only "slightly optimistic" about the deal.

He added, "if the deliveries don't resume despite such strong declarations by the Russian and Ukrainian prime ministers, there will be a total crash in the confidence of EU consumers, citizens and the enterprise."

A conflict situation

Prime Minister Vladimir Putin said Sunday that transit of Russian gas may resume shortly following talks with his Ukrainian counterpart Yulia Tymoshenko in Moscow.

The statements come after Russia and Ukraine on Saturday held gas crisis talks in Moscow that the European Union said were the "last and best chance" to resolve the row that has left Europe struggling without key gas supplies.

"It's clear the conflict situation that has arisen should be resolved with maximum speed," President Dmitry Medvedev said at the start of Kremlin talks including Ukrainian Prime Minister Yulia Tymoshenko and European Union envoys.

"We'll do everything to ensure the current crisis is resolved," he said, adding later that he wanted Russian gas supplies to Europe to resume "in the next few days."

Earlier, Tymoshenko was greeted by Russian Prime Minister Vladimir Putin, fresh from a visit to Germany dominated by European concerns about the cut-off of gas supplies in the middle of a bitterly cold winter.

The EU's Energy Commissioner, Andris Piebalgs, the prime ministers of Belarus, Kazakhstan, Moldova and Serbia as well as officials from Bosnia, the Czech Republic, Slovakia and Turkey also attended the energy transit talks.

‘An international mechanism’

Medvedev also called for the formation of an "international mechanism" that would prevent disputes over European gas transit in the future.

A spokesman for Gazprom, Sergei Kupriyanov, was quoted as saying the Russian energy giant was "expecting to conclude a bilateral agreement with Ukraine on the question of transit and on future bilateral cooperation."

A spokesman for the European Commission's delegation to Moscow, Denis Danilidis, told reporters on the sidelines of the talks: "We are doing everything we can to assist the process.

"Some countries are in a simply tragic situation, like Bulgaria and Slovakia. We simply want the gas and we're willing to do what we need to get it," he added.

As she headed for Moscow, Tymoshenko expressed hopes for a deal, saying: "There is a need to compromise in order to preserve friendly relations between Ukraine and Russia and to uphold the reputation of both countries in Europe.

"I am sure that such a compromise will be brokered," she added.

But she also warned that she did not want "a knife in the back," apparently referring to her constant infighting with Ukrainian President Viktor Yushchenko, who has taken a harder line against Russia in the negotiations.

An optimist

Yushchenko's senior economic aide Bogdan Sokolovsky was also at the talks.

Speaking to German reporters on Saturday, Putin said he was "an optimist" about the meeting, adding: "I see that we will have to find an agreement at the end of the day."

Putin also said there was "a trend of rapprochement" with Ukraine.

Europe warned Friday that it would be forced to review relations with Russia and Ukraine if they did not restart the flow of gas to Europe over the weekend, as the cutting of major gas supplies from Russia ground on for a second week.

A spokesman for the European Commission, the EU's executive arm, Johannes Laitenberger, said the 27-nation bloc would determine next week whether to continue "business as usual" with Moscow and Kiev if the weekend talks failed.

After talks with Putin in Berlin, German Chancellor Angela Merkel said that gas companies were discussing a "test" resumption of Russian gas supplies through Ukraine and that such a deal should be "implemented quickly."

Shut out

One solution proposed by Russia was the creation of an international consortium, including European energy companies, to help bear the disputed costs of transit through Ukraine.

The gas crisis has cost EU states hundreds of millions of dollars (euros) and has meant little or no gas in a swathe of countries in southeastern Europe. Gazprom says it has lost more than one billion dollars so far.

Millions of people in the region have seen their gas-fired central heating either completely cut off or substantially reduced, schools have been forced to close down and many factories have been at a standstill because of the cut-off.

The crisis began on January 1 with Russia halting supplies to Ukraine over a payment dispute and later escalated with a complete cut-off of gas transiting through Ukraine to Europe amid mutual accusations between Moscow and Kiev.

How the gas crisis is affecting European countries as of the weekend:

BOSNIA: Bosnia, which was hit especially hard in the early days of the gas cut, extended Friday a gas supply deal with German gas company E.ON for another seven days, Bosnian importer BH-Gas said. Bosnia receives 1.5 million cubic metres of gas per day from E.ON.

BULGARIA: Bulgaria was to start receiving two million cubic meters of gas daily from Greece "in the coming days" after a deal between the two prime ministers. Turkey has also offered to deliver 500,000 cubic meters of gas per day, but the details of a deal have yet to be worked out. Bulgaria's reserves could last 100 days, officials said. Meanwhile, Bulgarian electricity provider CEZ reported small power failures in Sofia as electrical heating appliances overloaded the grid.

CROATIA: Croatian oil and gas company INA extended until Tuesday an emergency supply deal with Germany's E.ON, which was supposed to run out on Friday. Under this deal, Croatia receives about 42,000 cubic metres of gas per hour. INA also signed a contract with France's GDF Suez for 40,000 cubic metres of gas per hour until Tuesday. Zagreb says it has enough reserves for about two weeks. It also receives about 30,000 cubic metres of gas per hour from Italy's ENI.

GERMANY: German energy agency Dena warned Germany could start running out of reserves in three to four weeks, if the cold weather persists and Russian gas supplies do not resume, according to the daily Bild. Reserves have already fallen to 59 percent and could drop below 50 percent this week, the newspaper FTD also reported.

MOLDOVA: The poorest country in Europe and one of the hardest hit by the gas crisis, Moldova started receiving a trickle of gas from Ukraine's own stocks this week. But supplies for the region were still far below normal levels at just 600,000 cubic metres per day compared to eight million cubic metres usually.

ROMANIA: Authorities have increased supplies to industry users who have requested it, said Economy Minister Adriean Videanu. "We have met every single request," he said. Consumption for industrial users was restricted immediately after Russian gas deliveries were halted.

SERBIA: Germany and Hungary have agreed to continue supplying 4.7 million cubic metres of gas daily to Serbia until January 24. Serbia was also conducting talks to receive an additional one million cubic metres of gas per day to help industrial users. According to the association of employers, 59 companies have had to halt or cut down production due to the gas shortage and were totalling losses of about 2.9 million euros daily.

SLOVAKIA: Czech gas company RWE Transgas will start delivering German gas to Slovakia, in the amount of 6.3 million cubic metres per day, on Sunday. Restrictions on gas usage by companies will also be lifted on Monday, allowing them to resume production after a 10-day halt.


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