EU orders measures to avert gas crises

By Pete Harrison

BRUSSELS (Reuters) - European Union countries must bolster their gas networks to withstand future supply cuts of up to 60 days, the EU's executive arm said on Thursday as it overhauled energy security rules.

A pricing dispute between Russia and transit country Ukraine cut gas supplies to Europe during freezing weather last January and the EU will host talks with Kiev, Moscow and international lenders on Friday to try to avert another crisis.

"Europe must learn the lessons of previous crises and make sure that European citizens are never again left in the cold," European Commission President Jose Manuel Barroso said.

EU Energy Commissioner Andris Piebalgs said Slovenia, Lithuania and other Baltic states had the most to do, and Denmark, Germany and Greece were among the best prepared.

About one fifth of EU demand is satisfied by Russian gas that flows through pipelines in Ukraine, whose payment difficulties have increased fears supplies could be cut again.

"Where are the biggest challenges? It's the Baltics," Piebalgs said. "The two countries where the biggest investments need to be made are Lithuania and Slovenia."

"The easiest steps are for Denmark, but Greece is also doing quite well," he added. "Germany is fine. Belgium is doing fine -- those countries that have decent storage capacity."

COMMUNITY EMERGENCY

Europe wants to reduce its reliance on Russian energy and EU countries signed an agreement with Turkey on Monday on the Nabucco pipeline, which is intended to provide gas from the Caspian and the Middle East.

Under the new rules, the European Commission would declare a "Community Emergency" if the EU lost more than 10 percent of its gas imports. EU countries would then have to help each other by ensuring unhindered flow of gas across their borders.

The German government and industry group BDI said energy companies should take the lead in managing gas crises.

"Only in very exceptional cases should the Commission step in," said BDI secretary general Werner Schnappauf.

By the end of March 2014, member states will have to ensure their infrastructure is sufficiently diversified to deal with a cut of up to 60 days in freezing weather.

Member states will be asked to draw up risk assessments and plans for responding to emergencies by the end of September 2010.

The proposal requires the approval of the European Parliament and member states, many of which are reluctant to cede control of energy supplies despite repeatedly calling on the Commission to help coordinate efforts.