* Gazprom says deals on South Stream link to be signed this
* Issues statement a day after EU suspends regulatory talks
* Ukraine crisis has shaken relations between Moscow and
By Henning Gloystein and Dmitry Zhdannikov
LONDON, March 11 Russia's Gazprom,
disregarding European Commission plans to delay talks, said it
expected to sign deals this month on building its major South
Stream pipeline to carry gas to central and southern Europe
without crossing Ukraine.
It made the announcement a day after the Commission said it
would postpone talks with Gazprom over South Stream which still
requires European Union legislation, including exemptions from
rules that limit pipeline ownership and require access be
provided to other gas firms.
The bloc, already concerned to reduce the Russian
state-controlled company's dominance over its energy supply,
especially in eastern Europe, has been further rattled by
Russia's seizure of the Crimea region from Ukraine.
"South Stream is confidently moving ahead. Agreements on the
laying of the first leg of the pipeline will be signed before
the end of March, as well as agreements on the supplies of
pipelines for the second leg," Gazprom said on Tuesday after the
South Stream consortium, which it leads, met in Switzerland.
Past supply disruption because of pricing disputes between
Moscow and Kiev have motivated EU leaders to seek alternatives
to Russian gas, and the current Ukraine crisis has increased the
EU's focus on diversifying energy sources.
But previous efforts to bring new gas suppliers to Central
Europe have so far largely failed.
The Nabucco pipeline project, intended to bring Central
Asian gas into the region, was ditched last year, leaving the
region reliant on Russia and its South Stream project.
Instead the Trans-Adriatic Pipeline (TAP), which will pump
around 10 bcm of gas each year from Azerbaijan towards the end
of this decade, will go to Italy via Turkey, Greece and Albania.
The 2,400 km (1,500-mile) South Stream pipeline, which
Gazprom says will be fully operational by 2018, would be able to
supply over 60 billion cubic metres (bcm), or almost 15 percent
of Europe's annual gas demand, pumping gas through the Black Sea
into southeastern Europe.
While the project would not solve problems about supply
diversity, it would increase security of supply by avoiding
transit through Ukraine, currently an important pipeline route.
While Europe lacks immediate alternatives to replace Russian
supplies, long-term efforts are in place to reduce Moscow's
dominance in the sector. Moscow now supplies about a third of
Europe's gas needs, rising to 100 percent in some eastern
Potential news sources of gas include plans to access
recently found fields in the East Mediterranean as well as hopes
that North American shipments of liquefied natural gas (LNG)
could come to Europe.
Following a shale gas production boom, the United States is
expected to begin exporting LNG from 2015, although analysts say
that U.S. exporters would prefer selling to Asia, where prices
are twice as high as in Europe.