WRAPUP 9-Russian gas disruption spreads across Europe

Tue Jan 6, 2009 3:14pm EST
 
[-] Text [+]

* Gazprom says it has cut gas flows to Europe sharply

* Gazprom says Ukraine blocked three gas pipelines

* France says Russian gas supplies down 70 pct

* Bulgaria: "We are in crisis situation"

* Gas prices rise sharply in London

(Updates with Czech minister, Gazprom comments)

By Christian Lowe

MOSCOW, Jan 6 (Reuters) - Russia sharply cut gas flows to Europe via Ukraine on Tuesday in a dramatic worsening of a pricing dispute with Kiev that threatened to disrupt supplies as far west as Italy and Germany.

The escalation in the price dispute and severe cold weather drove the British gas market, Europe's biggest and most liquid, to its highest level since October.

Officials from the European Union, which is dependent on Russia for a quarter of its gas, met both sides in the dispute on Tuesday and the bloc urged them to find a solution this week.

The Czech Republic, which holds the EU's rotating presidency, said it was considering the "extreme option" of a three-way EU-Russia-Ukraine summit.

"The only solution is to get straight to the negotiating table," Czech Industry Minister Martin Riman said after talks with Alexander Medvedev, the deputy CEO of Russian gas export monopoly Gazprom (GAZP.MM).

"The Russian side ... is ready for this step. We are too and I expect the Ukrainian side, after the talks in Kiev, is also ready," said Riman after meeting Medvedev in Berlin. Earlier in the day he met Ukrainian officials in Kiev.

The head of Ukraine's state energy firm said he would fly to Moscow on Thursday.

Russia and Ukraine blame each other for the crisis, which has struck at the height of the European winter and spread alarm across the continent.

EU members Austria and Romania said deliveries were down 90 percent and 75 percent respectively, and German energy firms said there could be gas shortages in Europe's biggest economy if the dispute dragged on and sub-zero temperatures persisted.  Continued...

 

Featured Broker sponsored link

Editor's Choice

A selection of our best photos from the past 24 hours.  Slideshow 

Most Popular on Reuters

  • Articles
  • Video