UPDATE 1-Central Europeans spur energy links, joint crisis management

Thu May 15, 2014 9:58am EDT

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(Adds agreement on crisis management planning, Polish, Hungarian PMs)

By Jan Lopatka and Jakub Iglewski

BRATISLAVA May 15 (Reuters) - Prime ministers from central European countries on Thursday backed Polish plans for close energy cooperation and agreed to draft joint crisis management plans for the possibility of a cut in natural gas from Russia in the coming months.

Central European countries are vulnerable to any interruption in supplies because they take most of their natural gas from Russia, mainly via Ukraine.

Russia and Ukraine have been at odds since Russian state-controlled Gazprom almost doubled prices following protests that toppled Ukraine's pro-Moscow President Viktor Yanukovich. Russian gas exporter Gazprom has demanded upfront payments for June volumes, raising the risk of a disruption in supplies.

"We reached an agreement today to work on the details of the gas crisis mechanism on expert and ministry levels," Polish Prime Minister Donald Tusk told a news conference on the sidelines of the Globsec security forum in Bratislava.

"This kind of regional mechanism will be a good, motivational example to create such a mechanism for the whole (European) Union as fast as possible."

Hungarian Prime Minister Viktor Orban said there were "enough reasons to speculate" gas flow would be interrupted.

Gazprom has cut off supply to Ukraine twice in the past decade in pricing disputes with Kiev which it says currently owes $3.5 billion for gas already delivered.

Central European countries have already built several interconnectors between their pipeline systems and are building more, enabling them to reverse the flow of gas if needed.

Poland also plans an LNG terminal to allow it to import super-cooled gas.

The steps are devised to raise supply flexibility and raise the ability to pump gas among the countries in case of emergency.

Infrastructure gained renewed focus in the EU following a contract dispute between Moscow and Kiev in 2009 that stopped gas flows via Ukraine in the middle of winter.

The regional leaders also backed calls for close energy cooperation within the EU and specifically to increase funding for new infrastructure.

"Completing the infrastructure for energy products in Europe should be a priority of the energy policy in the EU," Slovak Prime Minister Robert Fico said.

Poland's Tusk said in March that the EU must create an energy union to secure its gas supply because the current dependence on Russian energy makes Europe weak.

LACK OF UNITY

Hungary's Orban criticised the EU for failing to give stronger backing to the Nabucco pipeline project which was scrapped last year and which was due to bring gas from Azerbaijan.

Hungary now participates in the South Stream pipeline that will bring more Russian gas to Europe while bypassing Ukraine, which Orban said was the only option Hungary now had.

Austria's OMV signed an understanding with Gazprom on April 29 to build a spur of South Stream to Austria despite stiff resistance to the pipeline from EU and U.S. officials who want Europe to reduce its reliance on Russian energy.

Slovak Prime Minister Fico said that showed how commercial interests could eclipse strategic objectives, while Slovakia was paying for decisions it has made in the pursuit of common European goals.

"My government helped Ukraine. Despite various pressures, we made a decision to make a reverse flow for gas (to Ukraine)," he said.

"(Yet) as we were discussing safety and security of Ukraine, three western companies from the EU were signing contracts with Gazprom (which mean) that Ukraine might lose the ability to transit gas in the future. This is hypocrisy." (Editing by Jason Neely)

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