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| By Christian Lowe January
3, 2005
MOSCOW (Reuters) - Russia said deliveries of gas to European customers were back to normal on Tuesday as its energy officials prepared to meet counterparts from Ukraine to discuss a dispute that hit supplies across the continent. Russia was piping extra gas to European states after its decision at the weekend to cut off deliveries to Ukraine led to a storm of complaints from countries across Europe who suffered disruptions to their own supplies. Moscow's dispute with Kiev over a fourfold hike in the price for its gas was unresolved, with Russia telling Ukraine it had no right to tap supplies for its own needs and accusing Kiev of stealing gas intended for other European customers. Russia's state-run Gazprom said it would have talks in Moscow on Tuesday with a delegation from Ukraine's Naftogaz, the first official contacts since it turned off the taps to Ukraine on Sunday morning. Gazprom said that there was still a risk of supply disruptions to Europe if Ukraine continues to expropriate gas from the pipeline crossing its territory. "If weather conditions change it will mean that the illegal offtake by Ukraine could increase dramatically," Gazprom deputy CEO, Alexander Medvedev, said in an interview with Reuters. "There is still a danger that the situation could develop in such a way that we are not going to be in a position to compensate." In Kiev, a spokesman for Ukraine's state gas firm Naftogaz said the delegation in Moscow would be headed by the company's deputy head, Ihor Voronin. Supplies to Europe were hit because most of its Russian gas is piped across Ukrainian soil. Germany's E.on Ruhrgas said its supplies from Russia were back to normal, echoing statements from gas companies in Italy, France, Romania, Hungary, Poland and Austria. But events in the past 36 hours sent a chill through capitals and energy markets, with some analysts saying the disruption had hurt Russia's credibility as a dependable supplier of energy. Oil prices edged higher on Tuesday as consumers feared the row could yet crimp fuel supplies to Europe. In Britain -- Europe's only major, freely traded gas market -- wholesale prices rose as much as 8 percent on Tuesday. EU'S SOLANA INTERVENESEuropean Union foreign policy chief Javier Solana had telephoned senior Russian and Ukrainian officials to urge them back to the negotiating table, his spokeswoman said. Russia said the increase simply brought prices in line with market rates while Ukrainian officials have argued the Kremlin was using the issue to undermine the Kiev government ahead of parliamentary elections in March. The Kremlin has made no secret of its discomfort with the West-leaning stand of the Ukraine's President Viktor Yushchenko who rose to power a year ago after mass protests forced a rerun of an election initially won by a Moscow-backed candidate. Ex-Soviet Moldova, which like it neighbor Ukraine has pulled away from Moscow's orbit, has also had supplies of Russian gas cut off. Moldovan officials said they too had a delegation in Moscow on Tuesday for talks. UKRAINE ACCUSEDGazprom repeated its claim that Kiev was siphoning off gas intended for piping onward to customers in the EU. Kiev has denied taking Russian gas but said it would do so if temperatures fell below freezing. It says it is currently using gas from another ex-Soviet state, Turkmenistan. Gazprom cut supplies to Ukraine after Kiev rejected demands it pay four times more for its gas -- a sharp break with subsidized prices rooted in Soviet times. Europe receives a quarter of its gas from Russia. Since Soviet times Moscow has promoted itself as a reliable supplier -- an image it seeks to enhance as current chairman of the G8 group of industrial nations. Gazprom has said it will pipe an extra 95 million cubic meters of gas a day to Europe via Ukraine to make up for the volumes it said Ukraine was siphoning off. On Sunday, it cut volumes going along that route by 120 million cubic meters a day, the amount Ukraine had been buying. Analysts said there was little EU nations could do for now to lessen their dependence on Russian energy because there were no readily available alternatives. But Germany, Russia's biggest gas customer, said it would think twice about increasing its imports of Russian gas unless Moscow proved it was a dependable energy supplier. Poland's Prime Minister Kazimierz Marcinkiewicz told public radio his government saw diversifying gas supplies away from Russia as a priority. (Additional reporting by Dmitry Zhdannikov in Moscow, Olena Horodetska in Kiev and European bureaux) |
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