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January 15, 2009 Thursday
Updated
Jan 15, 2009
EU premiers plead for gas
MOSCOW/KIEV - EU states cut off for days from Russian gas in freezing temperatures pleaded with Moscow and Kiev on Wednesday to end wrangling which has stalled a deal to restore fuel supplies.

European Commission chief Jose Manuel Barroso called the crisis 'unacceptable and incredible' and said the EU executive would advise the bloc's firms to sue Russian and Ukrainian energy companies unless gas supplies were restored quickly.

The Kremlin called a gas user's summit in Moscow for Saturday, inviting EU chiefs, European states that use Russian gas and transit states.

Ukrainian President Viktor Yushchenko backed the idea but opposed Moscow as a venue and in Brussels there was concern the summit could be a Russian attempt to divide the bloc, which has so far been relatively unified in its line in the dispute.

A deal brokered by the EU, which gets a quarter of its gas from Russia, was supposed 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.

Russia began pumping gas meant for Europe via Ukraine on Tuesday but the EU said little or none was flowing yet to countries downstream suffering urgent energy shortages.

Russia accused Ukraine of deliberately cutting gas to Europe while Kiev said Russia had so far provided so little gas there was not enough pressure in the pipelines to pump it on.

Leaders from some of the worst affected countries visited the two protagonists on Wednesday to demand a swift end to the crisis, with signs patience is wearing thin with both sides.

'The biggest risk for both Russia and Ukraine is the issue of trust,' Bulgarian Prime Minister Sergei Stanishev told Russian Prime Minister Vladimir Putin in Moscow.

'The dispute has been running for a few years but it should not turn third countries into hostages,' he said. Temperatures plunged as low as minus 21 Celsius this week in Bulgaria.

Slovakian Prime Minister Robert Fico, visiting his Ukrainian counterpart Yulia Tymoshenko in Kiev, said his country had just 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 asked Ms Tymoshenko.

European pressure

Slovakian officials later said, however, they had secured new supplies to cover consumption until the end of January.

Slovakia, which 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 down or cut production.

The Slovakian government said Fico had stressed Ukraine's responsibility for the crisis and said it had 'negatively affected Ukraine's credibility'.

Ms Tymoshenko told Fico that Ukraine was 'the same hostage in the dispute as the European Union' while Russia's Putin told his visitors the European Union should put more pressure on Kiev.

'It is not our problem. It is the problem of the transit country and they must solve it,' Mr Putin told the premiers of Slovakia, Bulgaria and Moldova, all badly hit by the gas crisis.

'In my view, European officials could do more to put pressure on the transit country to ensure European interests,' he said earlier.

The gas dispute has hit 18 countries in the depths of winter, shutting down factories and leaving householders shivering.

EU president Mr Barroso told the European Parliament that failure to honour supply agreements would mean Russia and Ukraine could no longer be regarded as reliable.

'If the agreement sponsored by the EU is not honoured, the Commission will advise EU companies to take this matter to the courts,' he told EU lawmakers.

Mr Yushchenko later told reporters during a trip to Poland that Ukraine was ready to guarantee shipments to customers if Russia piped 300-410 million cubic metres of gas a day for European customers without payment, pending a resolution of the pricing dispute with Moscow.

The gas row reflects poor political relations between Russia and Ukraine. Moscow is vehemently opposed to moves by Ukraine's pro-Western leadership to join the US-led Nato alliance.

Russian President Dmitry Medvedev said Gazprom had lost US$1.1 billion (S$1.64 billion) from the fall in exports to Europe caused by the row.

'Our country cannot lose such money. The time for presents is over,' Mr Medvedev said on state television.

Gazprom is demanding Kiev hand over US$614 million for unpaid gas bills and pay US$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 US$179.5.

Analysts in Kiev say Ukraine, saddled with debt and hard hit by the global slowdown, cannot afford that price. -- REUTERS

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