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ORIGINAL FRENCH ARTICLE: Moscou accuse Kiev de siphonner le gaz de l’UE

by Gaël de Santis

Moscow accuses Kiev of siphoning off EU’s gas

Energy : Confronted with the first reduction in the gas delivered through Ukraine to Romania and Bulgaria, the UE sends discordant signals.

Translated Monday 12 January 2009, by Isabelle Métral

“Since December 31st, Ukraine has refused to negotiate with Gazprom and has siphoned off gas supplies that were meant for European consumers,” Alexander Medvedev, the vice-president of the Russian energy group, complained last Saturday night. Yesterday Gazprom accused Ukraine of stealing 25 million cubic metres of natural gas that transited through its territory in the last 24 hours.

A spat over prices

In Romania, which buys a third of the gas it needs from Russia, 30% of the expected delivery was missing last Saturday. The Romanian Foreign Minister, Cristian Diaconescu, complained about this in a talk with his Ukrainian counterpart Volodymyr Ogryzko, and called upon Russia to “honour its commitments over gas deliveries”. Bulgaria itself is reported to be facing a 10 to 15% reduction in its imports.

Since Moscow cut off its gas supplies to Ukraine last Thursday as a result of a spat over prices, the Czech EU president is confronted with his first big crisis. The matter is all the more tricky for Prague as this country, together with Ukraine, Poland, Lithuania, Latvia etc., is one of the countries that favour the use of strong-arm methods with Moscow. “We refuse to take sides in the conflict, it is a trade spat, we are not familiar with all the particulars of all the contracts, which are confidential,” Alexandr Vondra, the Czech vice-prime minister prudently said on Saturday. Being charged with the mission of finding a solution that would guarantee adequate energy supplies to all EU countries, Alexandr Vondra finds himself obliged to let down his former allies overnight and to suggest– as a lasting solution –bypassing Ukraine by building gas-pipes in the Baltic sea and in the Mediterranean.

For Ukraine is not considered reliable enough. Already in 2006, a disagreement over gas prices between Kiev and Moscow had sent tremors through the EU. This time Moscow wants to push up the price of gas for Ukraine to the European standard, namely $418 for 1,000 cubic metres, instead of the $179.5 rate that Kiev is presently paying. Last Thursday, Kiev turned down Moscow’s offer of a $250 rate and implied that it would like to raise its transit rate for gas deliveries to other UE countries.

Whereas in 2006 Brussels had backed Kiev in the name of a common supply policy, its attitude in the present case is more moderate. The EU must “not commit itself further than to encourage both parties to negotiate in good faith,” explained Cristina Gallach, the spoke-person of Javier Solana, the EU diplomacy boss. Indeed, whenever interest and energy supply are at stake, diversity will be the rule on the Old Continent.

Too much dependence on Russia

The Baltic States, Poland, Ukraine, enjoy a quasi-monopoly over the transit of gas and get a return for it, whereas Western Europe is at the delivery end of the gas-pipe. Besides, Eastern European countries are far more dependent on Russia for their energy consumption than other EU States. Their fear is that should the gas-pipes planned in the Baltic sea and in the Mediterranean not materialize, they should have to pay the real price for the Russian gas. As to Russia, its currency resources are getting thin owing to the slump in oil prices and consequently, its aim is to have all countries pay the full price.

Understandably, the present picture makes it difficult for the EU to play the Union card.

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