Sun, Jan 04, 2009 - Page 1 News List

Moscow-Kiev spat hits gas deliveries to neighboring EU

DPA , MOSCOW, BRUSSELS, KIEV, BUDAPEST AND PRAGUE

Russian natural gas deliveries fell substantially in downstream markets yesterday, drawing a sharp EU demand that the Kremlin and Ukraine end a row over energy.

Russian natural gas volumes pumped via Ukrainian pipelines to Romania, Hungary, Poland and Slovakia were down, with Romania registering a 33 percent cut in deliveries.

Russia halted natural gas deliveries to Ukraine on Thursday because of a delivery contract dispute.

Fuel volumes moving onward to Europe fell marginally on Friday.

The Kremlin at the time said it was leaving volumes sent to Europe unchanged. But on Friday evening, Kiev announced it would siphon some of the EU-bound gas for its own needs, citing the absence of a contract between Ukraine and Russia for shipping gas to the EU.

Gas volumes from Russia to Hungary fell 25 percent, and deliveries to Poland dropped 6 percent, statements from their energy officials said.

The energy supply reductions came as falling temperatures were forecast across eastern and central Europe, with some regions expected to see temperatures fall to minus 20ºC.

Slovakia relies on Russia for all of its gas needs, while Hungary gets 65 percent and Poland 46 percent of its gas from Russia, figures from the International Energy Agency in Paris showed.

The shortfalls drew a sharp call from the EU for Russia and Ukraine to stop jeopardizing supplies to the bloc.

The statement urged “an urgent solution to the commercial dispute on gas supplies from the Russian Federation to Ukraine, and for an immediate resumption of full deliveries of gas to the EU member states.”

The statement was released late on Friday evening by the Czech government, which holds the bloc’s rotating presidency.

The EU initially tried to stay out of the dispute, calling it a “commercial matter between two non-EU companies.”

But the fall in supplies forced its hand.

“Energy relations between the EU and its neighbours should be based on reliability and predictability. Existing commitments to supply and transit have to be honoured under all circumstances,” the statement said.

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