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Tymoshenko to EU: Row with Russia won't cut gas supplies

Business Materials 5 March 2008 16:48 (UTC +04:00)

(dpa) - Ukrainian Prime Minister Yulia Tymoshenko on Wednesday promised that a row between her government and Russian natural gas monopolist Gazprom would not affect energy supplies to the Europe Union.

"Ukraine is a reliable partner," Tymoshenko told the Interfax news agency. "We will meet our responsibilities for the transport and export of gas to EU nations."

Beginning Monday, Gazprom reduced volumes of gas for the Ukrainian market by 50 per cent in a pressure tactic to force Ukraine to pay up a gas bill estimated by the Russian company at 600 million dollars.

The European Union, which receives roughly one-quarter of its gas from Gazprom, worries that chronic gas disputes will affect its supplies.

Tymoshenko's administration has conceded it owes Gazprom, but says the sum is substantially less, because of money allegedly owned by Gazprom to Ukraine for transporting gas to downstream customers in Europe, among other fees.

Ukrainian President Viktor Yushchenko, technically Tymoshenko's boss, on Wednesday repeated demands Tymoshenko return to the negotiating table with Gazprom "and resolve the dispute immediately." Tymoshenko has ignored similar instructions in the past.

Ukraine will in the face of the Gazprom reductions supply Ukrainian consumers from its own reserves, and leave gas volumes destined for Europe untouched, officials from Tymoshenko's administration said on Tuesday.

But analysts in Moscow said it was unclear how large are Ukraine's natural gas reserves.

Naftohaz Ukrainy, Ukraine's natural gas distributor, on Wednesday appeared to up the ante in its ongoing battle of nerves with Gazprom, announcing it was reducing its estimate of natural gas left in domestic reserves from one month to two weeks.

Were Ukraine's "energy security to be threatened," Ukraine could be forced to make up gas shortages by "diverting" gas en route to European customers, to Ukrainian consumers, according to a Tuesday Naftohaz Ukrainy statement.

Naftogaz Ukrainy called to informed Gazprom on Wednesday of a reduction on gas transit to Europe by 60 million cubic metres, news agency Itar-Tass quoted Gazprom spokesman Sergei Kupriyanov as saying.

Kupriyanov charged that despite Tymoshenko's statement, "independent observers are still not allowed to supervise gas facilities in Urkaine and Naftogaz sent Gazprom a message today saying it would reduce deliveries of gas for the European consumers."

Kupriyanov stressed that Gazprom had paid in full for the transit of gas to European consumers.

An estimated 80 per cent of gas flow travels to European markets via Ukrainian pipelines, giving Kiev leverage over Gazprom's single largest source of income.

Naftohaz has justified skimming gas destined for transit by accusing Gazprom of violating its contract to ship it gas from Central Asia.

Gazprom executives for their part have argued that the present Ukrainian debt stems from poor weather in Central Asia forcing up gas prices.

A Gazprom total cut off of gas supplies to Ukraine in late 2005 led to a reduction of gas volumes to Europe and price spikes as far away as France, after the Ukrainians began siphoning gas destined for Europe.

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