Czechs oppose single EU body for gas, oil purchases

PRAGUE Wed May 21, 2014 12:57pm EDT

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PRAGUE (Reuters) - The Czech Republic opposes a Polish proposal to create a single body to buy gas for the European Union but could support private groups voluntarily joining up for purchases, according to a position document approved by the government on Wednesday.

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

Polish Prime Minister Donald Tusk has called for the EU to create an energy union because the current dependence on Russian energy makes Europe weak. He said on Wednesday Europe's failure to complete a single energy market and to unite when negotiating gas contracts with Russia costs around 30 billion euros ($41 billion) per year.

"The government approved our position on that proposal, which says we support our Polish colleagues on many issues, but there are many that we have to look at a bit more," state secretary for EU affairs Tomas Prouza told the Czech radio.

The approved position paper said the Czech Republic did generally "not support the creation of one body in the EU responsible for buying oil and gas".

"However, it is possible to support the creation of a mechanism to aggregate demand on a voluntary basis, i.e. the possibility of joining together private entities active in member states," said the paper obtained earlier by Reuters.

The paper said the country should support efforts to raise energy security of Central Europe, and backed a Polish call for funding of new infrastructure from the EU's Connecting Europe Facility, a fund for energy, transport and digital networks.

The news comes as U.S. Vice President Joe Biden said on Wednesday the development of a secure, diverse and interconnected energy market would be the next step of European integration as the continent seeks to diminish its dependence on Russian gas.

INTERCONNECTORS

The Czech Republic supports the strengthening of investments in gas interconnectors.

Central European countries have already built several interconnectors between their pipeline systems and enabled reverse flow of gas. They are planning more connections to enable them to find alternative sources of gas if needed.

"In principle, we view the Polish initiative positively. The Czech government is ready to support north-south interconnection of gas pipelines," Industry Minister Jan Mladek told reporters.

"It is a long-term intention. It would increase long-term independence of the Czech Republic from gas supplies from Russia."

Prime ministers from central European countries agreed last week to draft joint crisis management plans for the possibility of a cut in natural gas from Russia in the coming months.

Russia provides around one third of the EU's oil and gas. It shook the international community with its military intervention and annexation of Ukraine's Crimea peninsula in March.

European leaders have agreed to accelerate their quest for more secure energy supplies and asked the European Commission to draw up detailed proposals by June on how to do that.

A draft Commission document seen by Reuters showed this week member states should conduct stress tests before winter to work out how vulnerable they would be in the event the crisis over Ukraine leads to a major disruption of natural gas supplies.

(Additional reporting by Jason Hovet; Editing by Dale Hudson and David Evans)

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