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UPDATE 2-EU orders measures to avert gas supply crises

Thu Jul 16, 2009 9:11am EDT

* States must be able to cope with 60-day cut in supplies * "Community Emergency" if EU loses 10 pct of gas imports * States must ensure unhindered flows across borders in crisis

(Adds details, quotes)

By Pete Harrison

BRUSSELS, July 16 (Reuters) - The European Union told member states on Thursday to store more natural gas to ensure they are ready for any new suspension of supplies by Russia.

Setting out new gas security rules, the executive European Commission said the 27-nation bloc ought to have enough natural gas in storage to cope with a crisis of up to 60 days.

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. [ID:nLF215570]

"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 it with gas from the Caspian and the Middle East. [ID:nLD637622]

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.

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.

EU energy ministers approved a similar proposal on oil stocks last month after stripping it of its most important provisions.

Piebalgs said EU states had been widely consulted on the new gas rules and were unlikely to weaken them.

"I think we have sufficient support to say they will not be watered down, because we have proposed a text that is optimum," he said.

(Editing by Keiron Henderson0



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