EU faces deepening energy crunch over gas row

Russian gas supplies to Austria, Slovakia and the Czech Republic were halted, adding to the list of EU states left without Russian fuel in freezing mid-winter temperatures.


AFP - All deliveries of Russian gas through Ukraine were halted on Wednesday, officials from both sides said, amid growing prospects European consumers could suffer from the crisis amid freezing weather.

Ukraine accused Russia of cutting off the gas to Europe while Russian energy giant Gazprom blamed Kiev for shutting the last remaining pipeline. But neither disputed that supplies of Russian gas across Ukraine had now been halted.

Ten European states have now reported complete halts of Russian supplies, with Austria, the Czech Republic, Romania and Slovakia becoming the latest countries to announce they were no longer receiving any Russian gas.

A total of 17 countries had already complained of receiving lower supplies of Russian gas due to the crisis, which was sparked by a row between Kiev and Moscow over unpaid debts and prices for 2009.

"Russia stopped all transit through Ukraine" at 7:44 am (0544 GMT), the spokesman for Ukraine's state gas company Naftogaz, Valentin Zemlyansky, told AFP.

"Russia has left Europe without gas," he added.

But Gazprom vice-president Alexander Medvedev accused Ukraine of cutting all gas deliveries to Europe, warning of "very serious technical problems" if pipelines stay closed.

"Last night Ukraine shut down all gas pipelines to Europe," Medvedev told reporters in Berlin. "This morning no pipeline is bringing gas through Ukraine to Europe."

He warned there would be "very serious technical problems with this very cold weather if the pipelines stay closed for a long time."

In a letter to Russian President Dmitry Medvedev and European Commission chief Jose Manuel Barroso, Ukrainian President Viktor Yushchenko demanded that Russia resume gas shipments to Europe "immediately."

Russia is the world's biggest natural gas producer and provides about one-quarter of the gas used in the European Union, or about 40 percent of the gas the bloc imports. Some 80 percent of those imports pass though Ukraine.

"The Czech EU Presidency and the European Commission demand that gas supplies be restored immediately to the EU and that the two parties resume negotiations at once," the European Union said in a statement on Tuesday.

Russia cut gas supplies to Ukraine on January 1 over a payment dispute. In a bitter war of words, it then accused Ukraine of "stealing" Russian gas destined in Europe while Kiev blamed Moscow for the shortfalls.

Leaders in both Russia and Ukraine had pledged in recent weeks that supplies to Europe would not be disrupted by their dispute and they are now scrambling to paint each other as an unreliable energy partner for the EU.

Austria, the Czech Republic, Romania and Slovakia announced early on Wednesday that all their supplies of Russian gas had been cut off overnight.

Bosnia, Bulgaria, Croatia, Greece, Hungary and Macedonia had already announced that their deliveries had been cut. Bulgaria has resorted to rationing supplies to industry, Slovakia declared an energy emergency.

Poland, Serbia and Slovenia have reported drastic falls in Russian gas supplies, while France and Italy announced falls of 70 and 90 percent respectively.

Even Germany said it was starting to feel the first effects of the crisis.

Turkey said that supplies passing through Ukraine had been completely cut but that it was getting increased amounts through a separate gas pipeline that does not cross Ukraine.

The disruption coincides with the advance of an exceptionally cold front across much of central and western Europe. Temperatures dropped to minus 25 degrees Celsius (minus 13 Fahrenheit) in Serbia -- and many countries in eastern and central Europe depend on gas for central heating.

But experts said the immediate impact on consumers in Europe would be mitigated by the fact that they had consciously stocked up reserves after a similar Russia-Ukraine dispute caused shortfalls in 2006.

"We are still a long way from end-user customers having a problem," said Chris Weafer, chief strategist for Moscow-based investment bank UralSib.

In a sign of a possible compromise, the chief executive of Ukraine's Naftogaz, Oleg Dubina, said he would travel to Moscow on Thursday for talks with Gazprom.

Gazprom chief Alexei Miller also said that Russia would hold talks in Brussels on Thursday with the European Union and the EU Commission on the crisis.

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