/ 3 October 2007

EU to hold meeting on Gazprom-Ukraine row

The European Union is to hold an extraordinary meeting of national gas experts to discuss the dispute between Ukraine and Russian gas monopoly Gazprom, officials said on Wednesday.

The EU Gas Coordination Group will hold an ad-hoc meeting later this month to ”evaluate the situation” and assess its ”possible consequences” for the supply of natural gas in the EU, a spokesperson for the European Commission (EC) — the EU’s executive — told journalists.

The meeting was called as a response to Gazprom’s threat, made on Tuesday, to cut gas supplies to Ukraine by the end of the month if an outstanding bill of $1,3-billion remains unpaid, he confirmed.

The Russian and Ukrainian companies involved would be invited to present their views of the case to the meeting, the spokesperson said.

Gazprom is the single largest supplier of natural gas to the EU, and the only supplier to some of the union’s eastern members, such as the Baltic states. Eighty percent of the gas that it sends to Europe passes through Ukraine, according to EC experts.

On the last day of 2005, Gazprom cut its gas supplies to Ukraine in a dispute over price rises. The move caused gas shortfalls across much of the EU and led to accusations that the Kremlin was using Gazprom to pressurise the pro-Western administration in Ukraine.

The move ”did no good to Gazprom’s reputation as a supplier”, the EC spokesperson said.

On this occasion, however, Gazprom informed the EC of its intentions in advance, a move the EC spokesperson welcomed.

”We call for a speedy solution of this bilateral commercial dispute,” he said.

The meeting of the EU’s gas group will discuss how to share the union’s gas resources if any member suffers from supply disruptions as a result of the conflict, he added.

But while the EC and Gazprom both emphasise that the dispute is a commercial one, sceptics point out that Gazprom’s threat was made just one day after a coalition of pro-Western forces claimed a narrow victory in Ukraine’s parliamentary elections, held on Sunday.

The EC spokesperson would not comment on the timing of the dispute. — Sapa-dpa