EC to delay Russian South Stream gas pipeline talks-paper

Mon Mar 10, 2014 4:32am EDT

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FRANKFURT, March 10 (Reuters) - EU Energy Commissioner Guenther Oettinger is to delay talks with Russia on the South Stream gas pipeline project aimed at bringing Russian gas via the Black Sea, he told a German newspaper on Monday, in response to the crisis in Crimea.

"I won't accelerate talks about pipelines such as South Stream for the time being, they will be delayed," Oettinger, a German national, said in daily paper Die Welt.

Oettinger said that Europe was not facing a gas supply problem as a diplomatic solution is sought to Russian troops taking control of Crimea following the collapse of Ukraine's government. Energy stocks are ample and the winter is ending, taking urgency out of heating requirements.

Russia has started building South Stream, which would bypass Ukraine, to bring up to 15 percent of Europe's annual gas demand to the European Union via the Black Sea by 2018.

But the plan of state-controlled gas producer Gazprom has been frequently put into doubt over legal conflicts with the EU, which is seeking to wean itself off over-reliance on Russia for gas supplies.

The EC has demanded that Russia aligns pipeline charges and access to its pipelines with the EU's internal unbundling laws and is also investigating Gazprom over allegations that it has priced its gas unfairly.

Russia, in order to secure its customer base in Europe, has already bypassed Ukraine through the North Stream pipeline under the Baltic Sea, which has been operating since 2011.

Oettinger also said he supported visa and banking sanctions against Russian decision-makers and wealthy individuals, but no large-scale economic measures.

"It would be wrong to question the economic ties that have been built over decades (with Russia)," he said. "They are important for the economy and jobs in Europe and Russia." (Reporting by Vera Eckert; Editing by Greg Mahlich)

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