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EU demands end to Ukraine-Russia row as gas flow slows - 2nd Update

Posted : Sat, 03 Jan 2009 13:35:58 GMT
By : DPA
Category : Europe (World)
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Moscow/Kiev/Brussels - Eastern European nations began tapping their natural gas stockpiles Saturday as the flow from Russia slacked off amid a dispute between Russia and Ukraine about pricing and shipment of gas. Ukrainian gas company officials said they were sending their own supplies of natural gas to neighbours to make up for shortfalls after Russia tightened the taps on some gas exports Thursday.

For its part, Gazprom called on the European Union Saturday to "punish" Ukraine for hampering gas transit to Europe.

Alexander Medvedev, vice chairman of the Russian natural gas monopolist Gazprom, in a BBC television interview called Ukraine "no longer a reliable partner," and said the Kremlin intended to bypass Ukraine with future energy shipments to Europe.

Speaking in Prague later, Medvedev - who is also head of Gazprom's export services - called on the EU to "punish" Ukraine, saying it had stolen 35 million cubic metres of gas since Friday. Moreover, Ukraine still owed Gazprom 600 million dollars from last year, he said.

Medvedev, who was on an initial stage of a tour of EU countries including Germany, France, Britain, Belgium, Austria and Italy, said Gazprom would try to compensate EU customers with supplies from underground storage and a pipeline from Belarus.

But he warned that there were limited capabilities for this, and while Gazprom could "settle the commercial dispute ourselves" with Ukraine, it was up to the EU to act against Ukraine by obliging it to comply with the energy charter it signed with the EU in 1999.

Kiev officials while conceding that they are siphoning gas from the pipeline, have denied that they are stealing, arguing gas is needed to run pump stations throughout the system.

The two sides broke off negotiations on Wednesday, blaming each other for the break in talks. Both Kiev and the Kremlin declared they are willing to restart discussions, provided their opponent makes the first move.

Ukraine and Russia were locked in a seemingly annual ritual about the price Ukraine should pay for gas. With no agreement in sight, Russia cut off its exports to Ukraine Thursday until an agreement can be reached.

But since significant amounts of Russian gas must flow through Ukraine before reaching other client states, much of Europe risks seeing its flow of gas halted, either due to the Russian action or Ukraine's siphoning of gas.

On Saturday, the impact across Europe was mixed. Hungarian officials reported Saturday that gas levels have remained steady, although pressure in pipelines has dropped slightly.

Poland reported some dropoff in supply on

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