* Russian, EU diplomats say Russian cut to EU is unlikely
* Russia halted gas flows to Ukraine in June
* EU, Ukrainian utilities try to prepare for winter
(Add comment from Kremlin spokesman paragraphs 10-11)
By Natalia Zinets
KIEV, Aug 27 Ukraine warned Europe on Wednesday
that Russia could cut off gas to the continent this winter, but
Moscow responded that the supply of gas would continue
regardless of politics.
Ukrainian Prime Minister Arseny Yatseniuk said Kiev knew of
Russian plans to halt gas flows this winter to Europe, comments
that were promptly denied by Russian Energy Minister Alexander
"The situation in (Ukraine's) energy sector is difficult. We
know of Russia's plans to block (gas) transit even to European
Union countries this winter, and that's why their (EU) companies
were given an order to pump gas into storage in Europe as fully
as possible," Yatseniuk told a government meeting, without
disclosing how he knew about the Russian plans.
Russia has halted gas flows to Ukraine, a major transit
route for EU gas, three times in the past decade in 2006, 2009
and since June this year because of price disputes with Kiev.
In the past Russia's Gazprom has insisted it has
been a reliable supplier to the European Union, its biggest
market, and that flows to Europe were disrupted in 2006 and 2009
only after Ukraine took some of the gas intended for the EU to
meet its own winter demand.
Ukraine's warning came less than 24 hours after a meeting
between Russian President Vladimir Putin, his Ukrainian
counterpart Petro Poroshenko and Europe's main energy diplomat,
Guenther Oettinger, which included talks to secure Russian gas
flows during the peak winter months.
Novak called Yatseniuk's comment a "groundless attempt to
intentionally mislead or misinform European consumers of Russian
He added, "We will put forth maximum efforts to fulfil gas
contract obligations to European importers regardless of
political issues in this or that transit country."
Russia is open to "constructive dialogue" on energy with
interested partners including Ukraine, he said.
Kremlin spokesman Dmitry Peskov said on Wednesday Russia is
and will be a reliable supplier of natural gas to Europe.
"Russia was, is and will be a reliable supplier of energy
resources to Europe," Peskov told journalists, "We hope that
Ukraine in turn will guarantee unhindered transit."
A Russian ministry source said Ukraine would be more likely
to start taking gas intended for the European Union to meet its
own needs than Russia would be to cut off supplies to Europe.
Gazprom declined immediate comment.
SUPPLY TO UKRAINE HALTED
EU officials also say they do not expect Russia to cut off
supplies to EU customers, which account for about 80 percent of
Gazprom's gas sales. But they say they have options if it does.
"We have a Plan B for the worst-case scenario. But we don't
expect to need it," European Energy Commissioner Guenther
Oettinger said in Ungheni, Moldova on Wednesday.
European and Ukrainian power and gas providers have been
preparing for a potential Russian supply cut by injecting as
much gas as possible into storage over the spring and summer
Preparations have also been made for Ukraine to import
reverse flows of Russian gas from EU countries.
"The government has amassed 15 billion cubic metres (bcm) of
gas in storage," Yatseniuk said, and has plans to boost storage
to 25 bcm.
"Europe now has 16.52 bcm (31.2 percent) more gas in storage
compared to the same time last year," research firm Energy
Aspects said, but added that "based on recent average rates of
injection, Ukraine will only fill its storage to around 52
percent of capacity come the start of withdrawal season".
A lack of sufficient alternative supplies still means
Ukraine and some central and southeastern European countries
would not be able to cope with a winter gas cut without
large-scale energy supply disruptions, analysts say.
RUSSIAN GAS IS KEY
Russia is Europe's biggest supplier of oil, coal and natural
gas, meeting around a third of demand for all those fuels,
according to Eurostat data. It receives in return some $250
billion a year, or around two-thirds of government revenue.
While buyers can switch oil and coal suppliers relatively
quickly and easily, Europe receives most of its gas through
pipelines that are fed by only one supplier, Gazprom, in annual
exports worth $80 billion.
"Our main concern, no doubt, is gas. We have ongoing ...
negotiations between the Russian Federation and Gazprom on one
hand and Ukraine and (Ukraine's gas company) Naftogaz and our
European Commission," Oettinger said after meetings from Tuesday
through early Wednesday.
"On Friday we will be in Moscow for the next trilateral
consultation between the Russian Federation/Gazprom and
Ukraine/Naftogaz with the EU as a moderator of an important
process," he added.
The latest gas pricing dispute is closely intertwined with a
bigger standoff between Moscow and Kiev.
Ukraine's former Moscow-leaning president Viktor Yanukovich
fled following weeks of street clashes by people angry that he
had rejected an association agreement with the European Union
and instead promised to boost cooperation with Russia.
Moscow subsequently annexed Ukraine's Crimea peninsula in
March, and pro-Moscow separatists have staged an insurgency in
the east of the country.
The area where the fighting is concentrated, known as the
Donbass, is a major source of coal for Ukraine.
Yatseniuk said the government has been trying to diversify
coal supplies as "Russia and their mercenaries are bombing and
destroying mines". Russia has denied any involvement in the
(Additional reporting by Barbara Lewis in Brussels and Luiza
Ilie in Ungheni; Writing by Henning Gloystein and Vladimir
Soldatkin, editing by David Evans and Jane Baird)