EU gas supplies fall as Russia-Ukraine row deepens
KIEV (Reuters) - European Union countries were on alert on Saturday for further disruption to their gas supplies after Russia cut off Ukraine in a row over pricing, and accused it of stealing gas bound for western markets.
The EU's fear of disruption to its gas supply in the dead of winter became a reality late on Friday, when Romania's pipeline operator said supplies had fallen by 30-40 percent that day and Hungary and Poland also reported drops.
But there was no immediate sign the problem had spread further. The Czech pipeline operator said there were no problems in a main pipeline to Germany, Europe's biggest economy.
The Russian state-controlled gas monopoly, Gazprom, halted supplies to Ukraine on New Year's Day, saying Ukraine had failed to pay its gas bill and talks on 2009 gas prices had broken down.
The European Union, which gets a fifth of its gas from pipelines that cross Ukraine, said it would call a crisis meeting of envoys in Brussels on Monday and demanded that transit and supply contracts be honoured.
"Energy relations between the EU and its neighbours should be based on reliability and predictability," the Czech presidency of the 27-nation bloc said in a statement on Friday.
The disruptions are likely to undermine Russia's attempts to present itself as a stable energy supplier and add to concern that Moscow is trying to bully its neighbours just five months after the war with Georgia.
Ukrainian President Viktor Yushchenko has angered the Kremlin by trying to join the NATO military alliance.
Russia and Ukraine have insisted they will honour their commitments but Gazprom said Ukraine was stealing gas destined for Europe, a charge Ukraine's state-run gas company denied.
Europe, where temperatures fell below freezing overnight, has enough gas stockpiled to manage without Russian supplies for several days but could face difficulties should problems last for weeks, analysts said.
EUROPEAN SUPPLIES
In an indication of how seriously Moscow and Kiev view the crisis, both sides had delegations touring European capitals to explain their positions.
Martin Chalupsky, spokesman for pipeline operator RWE Transgas in the Czech Republic said: "We are without problems today."
"The problems are on the south pipeline in Hungary and Romania and so on. The main pipeline through Slovakia, Czech Republic and Germany are now without problems."
Russia's 2006 dispute with Ukraine prompted calls for the EU to reduce its reliance on Russian gas but Gazprom forecasts that the bloc will rely on Russia for as much as one-third of its gas by 2015, up from about a quarter now.
Alexei Miller, CEO of Gazprom, said on Thursday he wanted Ukraine to pay $418 (287 pounds) per 1,000 cubic metres (tcm) of gas, compared with the $179.50 Kiev paid in 2008.
Talks between Gazprom and Ukraine's state-run gas company, Naftogaz, have not resumed since failing late on New Year's Eve and the two sides remain far apart.
Ukraine says the most it can afford to pay is $235 but only if Gazprom pays it more for gas transit. Gazprom says it already has a gas transit deal to 2010 and does not need to rework it.
Gazprom says Ukraine owes it $600 million in fines for the late payment of $1.5 billion in gas bills. Ukraine's Naftogaz says it paid the $1.5 billion to an intermediary and Gazprom said it hopes to get that payment on January 11.
"We are ready to enter negotiations day and night and we have delivered this message to our Ukrainian colleagues but they probably have other tasks than to solve this problem because they are not in Moscow," Gazprom Deputy CEO Alexander Medvedev told the BBC in English.
Ukraine, facing a deep recession, says it can ill afford to pay higher prices for its gas.
President Yushchenko and Prime Minister Yulia Tymoshenko, who are locked in a battle for influence, would likely be loath to explain to voters why gas bills have to be raised again.
Ukrainians on the street in Kiev seemed to blame their own politicians for failing to get a deal with Russia.
"This is just bandits sitting in the Kremlin arguing, deciding, talking to bandits sitting in Grushevska street," Oleg Karlichyk a plumber in his mid-30s going on his way to work, said referring to the seats of power in Moscow and Kiev.