UPDATE 2-Dutch postpone Russian trade mission over Ukraine crisis

Wed Apr 9, 2014 10:43am EDT

Related Topics

* May 13-16 mission postponed after events in Ukraine

* No new date set

* Dutch were looking to expand economic ties with Russia (Adds details about gas output)

By Thomas Escritt

AMSTERDAM, April 9 (Reuters) - The Netherlands on Wednesday postponed a mission on energy trade to Russia planned for May because of Moscow's annexation of Crimea and increased tensions in eastern Ukraine.

The Netherlands is looking at ways to safeguard its energy supply after earthquakes caused by gas production forced it to cut output from the huge Groningen gas field this year. Combined with dwindling reserves, that may increase the country's demand for imported gas.

The May 13-16 mission would have brought together high level government officials and corporate executives from both countries.

The Dutch have been looking to expand economic ties with Russia, a big export market where the Netherlands is already a leading investor.

"(The mission) has been postponed. The cabinet made the decision today, based on recent developments in Ukraine, particularly in the east of the country," the foreign ministry said in a statement.

It set no new date for the trip.

"The European Union is reviewing its ties with Russia," Dutch Foreign Minister Frans Timmermans said. "A successful mission under the current circumstances is not possible."

The EU imposed travel bans and asset freezes on a group of Russian officials after Moscow's annexation of Crimea and has threatened to expand the sanctions if the crisis escalates.

NATO says Russia has massed tens of thousands of troops on Ukraine's eastern border, though on Wednesday Moscow denied they posed any threat to the country.

The crisis, the worst between Moscow and the West since the end of the Cold War, has prompted calls for the EU to reduce its reliance on Russian gas and oil, though that would inflict pain on European consumers, including in the Netherlands.

In 2013, the Netherlands bought around 18 billion euros worth of energy from Russia, more than half of it crude oil.

GAS OUTPUT

The Netherlands wants to become a north-western European gas hub and good relations with Russia, which provides around 35 percent of the EU's gas imports, could help it achieve this.

Long-term cooperation with Russia's Gazprom would also secure gas flows as natural gas reserves dwindle. The country is expected to become a net importer of gas by 2025.

The reduction of supply from Groningen this year, combined with a forecast decline in output from smaller fields, means the Netherlands is expected to produce a total of 67.4 billion cubic meters (bcm) of gas this year, down from 79.7 bcm last year, a spokeswoman for producer Nederlandse Aardolie Maatschappij said.

Last year, the main Dutch gas trading company GasTerra imported or bought 9.6 bcm of gas, including about 4.5 bcm of imports each from Russia and Norway. Norwegian pipeline operator Gassco has said there are strong limits on how much more it can supply.

(Reporting By Thomas Escritt, Anthony Deutsch and Sara Ledwith; Editing by Gareth Jones and Keiron Henderson)

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