March 6, 2018 / 5:40 PM / 6 months ago

Russia must speed up European gas pipeline projects due to Ukraine dispute: Novak

MOSCOW (Reuters) - Russian Energy Minister Alexander Novak said on Tuesday Moscow should speed up work on gas export pipeline projects to Europe due to tensions with Ukraine over the transit of gas.

FILE PHOTO: Russian Energy Minister Alexander Novak arrives for a meeting with OPEC oil ministers at OPEC's headquarters in Vienna, Austria, November 29, 2017. REUTERS/Heinz-Peter Bader

Kiev and Moscow plunged into a new gas dispute last week after Russia’s Gazprom decided not to resume supplies to Ukraine following an international arbitration court decision that went against the company. This prompted Ukraine to cut usage amid freezing weather.

The issue of gas transit has intensified since the Russian group said last Friday it would end the contracts after a Stockholm arbitration court ordered it to pay more than $2.5 billion to Ukrainian energy firm Naftogaz.

“In my opinion, we should speed up (the completion of projects) to mitigate the risks we’re having today,” TASS news agency cited Novak as saying.

Russia is facing opposition from some European countries over its Nord Stream 2 gas pipeline, which is meant to carry gas to Europe under the Baltic Sea.

Gazprom also planned to build at least one branch of the TurkStream pipeline to bring gas to southern Europe but has yet to reach a final agreement with Turkey. Both pipelines are designed to bypass Ukraine as a transit route.

Novak told reporters the dispute highlights the need to limit risks for Russian gas transit and to expand new routes, “including the Nord Stream 2, which is the most economically viable”.

“We meet European gas needs even during the most difficult times, in full and in the shortest time possible,” Novak said, reiterating Moscow’s line that Russia remains a reliable gas supplier to Europe.

The transit of Russian gas to Europe via Ukraine is going according to plan, he added.

Novak said no three-way talks between Russia, Ukraine and the European Union were envisaged, as during previous “gas wars”, because the dispute concerned Gazprom and Naftogaz. Russia meets most of Europe’s gas needs.

Gazprom plans to file an appeal against the Stockholm arbitration court’s ruling on the transit issue before the end of March.

Prices for British wholesale gas edged up on Tuesday, underpinned by concerns over low storage levels, after the previous session’s steep drop from multi-year highs that had been driven by freezing temperatures and supply glitches.

Additional reporting by Maxim Rodionov and Polina Nikolskaya; Writing by Katya Golubkova; Editing by Gareth Jones

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