EU bosses stay away from Russia-EU gas industry talks

Wed May 14, 2014 10:04am EDT

Related Topics

* Commission has attended previous EU-Russia dialogue

* No date yet announced for more three-way talks involving Kiev

* European industry calls on all sides to respect contracts

By Barbara Lewis

BRUSSELS, May 14 (Reuters) - European Commission officials stayed away from talks bringing together the Russian and EU gas industry on Wednesday and no date has been set for a new round of three-way political dialogue aimed at solving energy aspects of the Ukraine crisis.

Russian gas exporter Gazprom on Tuesday demanded pre-payment from Ukraine for June gas deliveries by June 2 or said it would cut off its supplies because of an outstanding bill for some $3.5 billion.

A first round of talks on energy security on May 2, bringing together European Energy Commissioner Guenther Oettinger and Ukraine's and Russia's energy ministers, was meant to be followed by further talks in mid-May.

The Commission, the EU executive, said on Wednesday that no date for new ministerial talks had been agreed.

European Commission President Jose Manuel Barroso said on Tuesday that expert-level talks between the three sides had been held on Monday and the EU was trying to organise a new ministerial meeting. He voiced hope there could be an agreement of the gas dispute before the end of May.

Referring to Wednesday's EU-Russia industry dialogue in Brussels, an official, who asked not to be named, said there was no explicit refusal by the Commission to participate, but Oettinger had "a very tight agenda".

Oettinger has attended previous rounds of the EU-Russia dialogue organised by Eurogas, which represents the European gas industry.

Eurogas President Jean-Francois Cirelli said only: "What we are saying in terms of Eurogas is that dialogue is very important."

From the Russian energy ministry, Alexander Abramov, an official who is involved in dialogue with the European Union, said the price of gas was the major sticking point in the EU-Russia-Ukraine dialogue.

"Our relationship with the EU is going through an ordeal," he said through an interpreter.

Ukraine is a transit state for about half of the gas Russia delivers to the European Union, meaning there is a risk of disruption if Moscow cuts off supplies to Kiev. The EU relies on Gazprom for roughly one third of its gas imports.

Cirelli said he believed Gazprom would honour its contracts to European customers.

"Quite simply there is an obligation from the Russian side to supply Europe and there are obligations from the Ukraine side to allow transit. It is paid for that. What we are asking from the European gas companies' point of view is just respect that obligation," he said.

One of the options for improving supply security for Ukraine is via reverse flow, which the Commission has been promoting to help maximise available gas supplies by shipping it in both directions, including back to Ukraine if necessary.

Cirelli, who is also vice-chairman of French gas company GDF Suez SA, said he would agree to sell gas via reverse flow: "If we agreed on commercial terms and it is in our interest to do so." (Editing by Jason Neely)

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