* Agreed to sign memorandum on April 28
* Ukraine looks to EU as Russia could cut supplies
* EU could provide maybe 14 bcm of Ukraine's annual gas use
of over 50 bcm
(Updates with memorandum signing date, quotes, details)
By Jan Lopatka
VELKE KAPUSANY, Slovakia, April 15 Slovakia,
Ukraine's best hope of getting gas from Europe if the Kremlin
halts supply, said it might help by reopening a small pipeline
but stopped short of agreeing to reverse the flow of major links
that take Russian gas to the European Union.
Russia has annexed Ukraine's Crimea region and is voicing
support for pro-Moscow separatists in the country's east.
Moscow has also nearly doubled the natural gas price it
charges Ukraine, tearing up a discount agreed in the past and
stoking fears of a supply cut as Kiev owes Russian exporter
Gazprom more than $2 billion.
That could affect gas for Europe piped through Ukraine as
well and has prompted the European Union to seek ways to help
Kiev, although the potential volumes involved are small compared
with Ukraine's needs.
On Tuesday the Slovak and Ukrainian economy ministers,
during talks near the border between their two countries,
discussed reopening a disused pipeline to take some gas out of a
main East-West line and loop it back into Ukraine.
But Slovakia failed to agree to Kiev's calls for it to
reverse the flow of one of four main international pipeline
carrying Russian gas so that the fuel goes straight back into
Ukraine, its minister, Tomas Malatinsky, said during a break in
the talks with Ukrainian counterpart Yuri Prodan.
The Slovaks worry that doing so might violate their
contracts with Gazprom.
But by taking gas out of the main pipeline once it is
already in Slovakia and contractually handed over to buyers on
the Slovak side, the country's pipeline operator Eustream thinks
it can supply gas to Ukraine without violating the contracts.
"Several options were opened over reverse flows. We are
working on an option which needs to be discussed further before
signing a memorandum," Malatinsky told reporters at a border
pumping station where talks were being held.
A spokesman for the Slovak Economy Ministry said after the
talks ended that they agreed to sign a memorandum on April 28.
The Ukrainian minister said the disused pipeline solution
would not guarantee nearly enough gas.
"The memorandum which is prepared is a certain step toward
reverse supplies from the European Union, but I am saying openly
that given the situation - a very exceptional situation - we
would need substantially more."
Combined, Ukraine's EU neighbours could provide a maximum of
about 14 billion cubic metres (bcm) of gas per year to Ukraine,
or more if Russian flows could be reversed, against an annual
requirement of about 55 bcm.
Ukraine has proposed reversing gas flows on one of four
pipelines that carry Russian gas to Europe via Slovakia.
This option would take advantage of unused capacity, be
easier and quicker to implement because no construction is
needed, and is a chance for Ukraine to receive higher gas
shipments, Prodan said.
"Together with what we have (agreed) with Hungary and
Poland, that would give us certain security," he said.
Prodan said the proposal on the unused pipeline, along with
the legal and technical possibilities of reverse flows, would be
The disused pipeline Slovakia is examining runs between its
Vojany power station and a storage site in Uzhorod, Ukraine.
The idea would require building a short connector into the
main Slovak transit pipeline on the Slovak side of the Velke
Kapusany pumping and metering border station. The link could
supply more than 3 bcm annually to Ukraine from October, rising
to around 9 bcm by next spring.
By comparison, about 1.5 bcm could be delivered to Ukraine
via Poland and about 3.5 bcm annually through Hungary. German
utility RWE began deliveries of natural gas to Ukraine
via Poland on Tuesday.
Klaus-Dieter Borchardt, director of the Internal Energy
Market in the energy department of the European Commission, who
also took part in the talks on Tuesday, said the Slovak proposal
was a good step forward.
"The European Commission calls on the two transmission
system operators...to sign this memorandum of understanding as
soon as possible and to implement it as soon as possible."
Regarding Ukraine's proposal for reversing flows, he said:
"We welcome the proposal of our Ukrainian partners that was
proposed today ...Technically it could be a short-term solution
for this year but we still have to analyse some legal issues
that might be linked to this solution."
(Writing by Jason Hovet; editing by Jason Neely and Anthony