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Russia, Ukraine trade blame in gas row

Russian gas supplies to Europe through Ukraine shut down completely on Wednesday, leaving growing numbers of European Union member states without Russian fuel in freezing mid-winter temperatures.

Supplies to Austria, Slovakia, the Czech Republic and Romania were halted by the escalating price dispute between Moscow and Kiev, which threatens to disrupt flows to countries as far west as Italy and Germany.

Some countries in Europe, which usually depends on Russian shipments via Ukraine for one fifth of its gas supplies, have taken emergency measures to eke out dwindling fuel reserves.

In Kiev, Ukrainian state energy firm Naftogaz said gas had stopped flowing through the last compressor station still functioning, on Ukraine’s Western border.

”Russia, which supplies 80% of its gas to Europe through Ukraine, has left Europe without gas. There is zero transit,” said Naftogaz spokesperson Valentin Zemlyansky.

Russian gas export monopoly Gazprom blamed Ukraine for the closure, which cut off supplies to more European states.

Czech importer RWE Transgas said the main transit pipeline from Russia to the Czech Republic and Western Europe was halted from midnight.

Austria’s OMV energy group, which earlier reported a big fall in Russian supplies, said flows had now stopped completely.

Slovakia and Romania also said their supplies were halted, joining Hungary, Bulgaria, Turkey, Macedonia, Greece and Croatia, who announced on Tuesday their supplies of Russian gas via Ukraine had shut down.

Europe’s heavy dependence on Russian energy — and its vulnerability to supply disruption — was highlighted when Moscow reduced volumes to Ukraine on January 1 after failing to reach agreement with Kiev over debts and gas prices.

With gas stockpiles in Europe falling with each day the disruption continues, and sub-zero temperatures driving up demand, there is no sign Moscow and Kiev are closer to resolving their row over pricing and transit fees.

Both sides traded blame. Russia has accused its former Soviet neighbour of stealing about 15% of the gas it ships across Ukraine to European states.

”Ukraine has stolen gas not from Russia, but from consumers who have bought the product and paid for it,” Russian Prime Minister Vladimir Putin said in televised remarks late on Tuesday, before Orthodox Christmas celebrations on Wednesday.

Ukraine’s pro-West President, Viktor Yushchenko, blamed Moscow for the supply disruptions, saying Moscow would continue to close the gas taps to Europe or stop them altogether.

‘Crisis situation’
So far Eastern and Central Europe have borne the brunt of the row, Bulgaria talking of ”a crisis situation” and cutting or suspending supplies to industrial users. Two fertiliser companies had to halt production.

Budapest airport said on Wednesday it would switch to oil from gas heating.

France and Italy also reported a steep drop in supplies but the euro zone’s major economies have so far escaped any economic repercussions.

Nevertheless, German energy provider E.ON Ruhrgas said drastic cuts and a prolonged cold spell could cause shortages. High energy users like aluminium, glass and metals makers could be hurt by a lengthy crisis.

The escalating price dispute and cold snap drove the British gas market, Europe’s biggest and most liquid, to its highest level since October.

The European Union gets a quarter of its gas from Russia, 80% of it via Ukraine, and officials from the bloc’s current president, the Czech Republic, met both sides on Tuesday to urge an early resumption of talks. — Reuters

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