September 10, 2015 / 1:21 PM / 3 years ago

UPDATE 1-Ukraine gas bypass deal a "betrayal"-Slovak PM

* Deal “making idiots of us”-PM

* Ukraine could lose billions, Slovakia hundreds of millions euros (Adds quotes, background, details)

By Tatiana Jancarikova

BRATISLAVA, Sept 10 (Reuters) - Slovak Prime Minister Robert Fico on Thursday called a deal between Russia’s Gazprom and its European partners to expand the Nordstream gas pipeline a “betrayal” that would cost Ukraine and Slovakia a combined billions of euros in transit fees.

Last week, Gazprom and its European partners signed a shareholders’ agreement on the Nord Stream-2 gas pipeline project that will bypass Ukraine and run beneath the Baltic Sea to Europe, bringing Europe closer into Moscow’s energy orbit.

Gazprom signed the deal with Germany’s E.ON and BASF/Wintershall, Austria’s OMV, ENGIE of France and Royal Dutch Shell. It stipulates that new pipeline capacity from Russia will come online in 2019.

“Suddenly an announcement came from Gazprom signing a contact with companies from western EU member states about building another branch of Nordstream. They are making idiots of us,” Fico said.

“For months, there have talks at the European Council about the need to help Ukraine stay a gas transit country, to help it through difficult winter months,” Fico told a joint news conference with Ukrainian Prime Minister Arseny Yatseniuk.

“They have betrayed an EU member state - Slovakia - and are going against political discussions with Ukraine at the European Council.”

Slovakia is the main entry point for Russian supplies to the European Union via Ukraine but Russia — which is embroiled in conflict with Kiev — wants to find alternate routes.

Fico said doing so through the Nordstream expansion would cost Ukraine billions of euros in badly-need transit fees and deprive Slovakia of hundreds of millions of euros in revenue.

“I will address this issue in this spirit at the European council meeting,” Fico said.

Russia provides for around a third of EU energy needs, but around half of the gas the EU imports from Gazprom is shipped via Ukraine, with which Russia is in conflict.

The Prime Minister also described Slovakia’s decision last year to pump gas eastward to Ukraine ahead of winter a success, saying it was possible to further increase the annual capacity of 14.5 billion cubic metres.

He did not say by how much but cautioned that any decisions on future gas flow increases would be up to the European Commission and consider the need for any existing gas contracts.

“There are technical possibilities to further expand the capacity,” Fico said. “We understand Ukraine’s needs concerning gas.”

Writing by Michael Kahn,; Editing by William Hardy

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