EU premiers plead with Ukraine and Russia for gas

MOSCOW/KIEV Wed Jan 14, 2009 6:35pm EST

1 of 22. A Gazprom technician inspects a pressure gauge at the gas export monopoly's Sudzha compressor station, January 14, 2008.

Credit: Reuters/Denis Sinyakov

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MOSCOW/KIEV (Reuters) - 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.

But Slovak Prime Minister Robert Fico, returning from high-level talks in Moscow and Kiev, said he did not expect Russian gas supplies via Ukraine to resume soon.

"The course of the talks allows us to state that we cannot expect early resumption of gas supplies to Slovakia," Fico told a news conference after returning from Moscow where he and Bulgarian Prime Minister Sergei Stanishev met Russian Prime Minister Vladimir Putin.

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 users' 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.

Slovakia and Bulgaria, whose leaders visited the two protagonists on Wednesday, are among the worst affected EU states. They called for a swift end to the crisis, with signs that patience is wearing thin with both sides.

"The biggest risk for both Russia and Ukraine is the issue of trust," Stanishev told Putin.

"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.

Fico told his Ukrainian counterpart Yulia Tymoshenko in Kiev that 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 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 January 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."

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.

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

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

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

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

Gazprom is demanding Kiev hand over $614 million for unpaid gas bills and pay $450 per 1,000 cubic meters 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.

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 U.S.-led NATO alliance.

(Additional reporting by Wojciech Zurawski; Writing by Jon Boyle and Richard Balmforth)

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