EU threatens legal action over gas supplies

The European Union raised the stakes with Ukraine and Russia on Wednesday by threatening to ditch them as gas suppliers and to promote court action against them unless shipments to Europe are immediately restored.

”Russia and Ukraine are showing they are incapable of delivering on their commitments to some European member states,” European Commission President Jose Manuel Barroso told the European Parliament in Strasbourg.

”If the agreement sponsored by the EU is not honoured as a matter of urgency, the commission will advise European companies to take this matter to the courts and call on member states to engage in a concerted action to find out alternative ways of energy supply and transit,” he said.

Barroso was referring to a deal signed on Monday in Brussels allowing international observers to monitor Russian gas flows destined to Western European clients via Ukraine.

Despite the deal, Ukraine and Russia have not yet restored supplies, despite promising to do so by Tuesday morning, citing technical difficulties.

”The current situation is both unacceptable and incredible,” Barroso said.

”Unacceptable as European consumers in some member states are still without gas after a week without supplies. Incredible because we remain in the situation the day after an important agreement is signed at senior level with assurance from Russian and Ukrainian leaders that they will implement the agreement and let the gas flow.”

Separately, Energy Commissioner Andris Piebalgs and Czech Industry and Trade Minister Martin Riman, whose country holds the rotating presidency of the EU, sent a letter to the energy ministers of Russia and Ukraine warning them that their countries’ credibility as gassuppliers risked being ”irrevocably damaged”.

”If natural gas flows are not established immediately in full volumes, the credibility of Ukraine and Russia as reliable partners will be irrevocably damaged,” the letter said.

Russian state-owned gas monopolist Gazprom on Wednesday offered to send almost 100-million cubic metres of gas to Ukraine through the Sudzha station on its southern most pipeline.

This amount represents about a third of what Gazprom’s European clients normally receive.

However, the offer was rejected by Ukraine’s Naftogaz, which wants the gas to be sent to its Pisarevka and Valuiki compressor stations to the east instead.

Piebalgs’s spokesperson, Ferran Tarradellas, said Gazprom and Naftogaz were now facing ”their last opportunity to limit the damages that they are doing to themselves”.

Russia supplies about a quarter of the EU’s gas needs, mostly through Ukrainian pipelines. EU countries have had to tap into their gas reserves as they have few alternative sources.

The commercial row between Gazprom and Naftogaz is believed to have strong political overtones because of Moscow’s irritation at plans by Kiev to establish closer ties with Brussels.

”We will soon see whether there is a technical hitch, or whether there is no political intention to honour this agreement,” Barroso said.

Barroso’s comments were his strongest yet since the dispute started, at the end of 2008. – Sapa-dpa

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