Putin threatens to reconsider relations with EU

2009-03-24 04:31:41  

    MOSCOW, March 23 (Xinhua) --

Russia will start reviewing its relations with the European Union (EU) if Moscow's interests were ignored, Prime Minister Vladimir Putin said on Monday.

    "If Russia's interests are ignored, we will also have to start reviewing the fundamentals of our relations," Putin told reporters in the Black Sea resort of Sochi.

    In a declaration signed on Monday by Ukraine, the European Commission as well as three financial institutions, Kiev pledges to carry out reforms to ensure the sustainability, reliability, efficiency and transparency of its gas transit system, including the independence of the gas transit operators.

    The declaration adopted in Brussels by Ukraine and the EU was poorly thought-out and unprofessional, Putin was quoted as saying by the RIA Novosti news agency.

    Russian Energy Minister Sergei Shmatko said earlier that Russia had been excluded from talks in Brussels on the modernization of the Ukrainian gas pipelines.

    Russia supplies a quarter of EU's gas needs, with 80 percent of the exports sent through Ukrainian pipelines. The energy supplier cut off gas supplies to Ukraine on Jan. 1 over a pricing dispute, and halted gas deliveries via Ukraine to Europe one week later, leaving millions of Europeans shivering in the depths of winter.

Russia blasts plan to modernize Ukraine's gas transit system

2009-03-23 20:03:40  

    BRUSSELS, March 23 (Xinhua) --

Russian Energy Minister Sergei Shmatko on Monday blasted a plan of the European Union (EU) and Ukraine to modernize the gas transit system that carries Russian gas to the EU through Ukraine.

    "It is surprising that the text (of a draft declaration) does not make a single reference to Russia as a gas supplier and as a strategic partner for the EU and Ukraine in this field," Shmatko told an international conference on the modernization of Ukraine's gas transit system.

    He said the Ukrainian system was part of the former Soviet gas transit system and has "organic links" with Russia.

    "In order to reduce technological risks, any process involving the modernization of the gas transit system in Ukraine would be left in a void in the absence of close coordination with Russia," he said.

    Shmatko said Russia is ready to be involved in the modernization of Ukraine's gas transit system, including the provision of finance.

    Ensuring reliable long-term gas supplies to Europe is a key priority of Russia in its cooperation with the EU in the energy sector, he said.

    The unilateral nature of the declaration gives causes for concern and puzzlement, said Shmatko. "A unilateral approach, not taking on board suppliers' interests, would lead to a skewed system and the whole system would need to be radically reviewed."

    Such a system would damage EU's energy security while Russia's participation would be a benefit for all sides, he argued.

    "The main goal of cooperation, in our view, is to ensure a long-term balance of the interests of all sides and to ensure guarantees of the supply of Russian gas to EU territories," he said. The exclusion of Russia is "quite intolerable," he added.

    Shmatko also pointed out that the expansion of the Ukrainian gas transit system envisaged by the declaration is not in line with the principle of diversification of energy sources.

    Currently 80 percent of EU gas imports from Russia, or about 20 percent of EU's total gas consumption, are transited through Ukraine.

    "Since the Ukrainian system transits most of the Russian gas to Europe, its modernization would need to involve the entire chain of stakeholders, beginning with producers, transiters and consumers," said Shmatko.

Editor: Xiong Tong

Ukraine wooes Western investments in upgrading its gas transit system

2009-03-23 23:03:10  

    BRUSSELS, March 23 (Xinhua) --

Ukrainian Prime Minister Yulia Tymoshenko on Monday wooed investments from the European Union (EU)and international financial institutions to finance the modernization of its natural gas transit system.

    "Our gas transit system is the most powerful in the world," Tymoshenko told an international investment conference on the modernization of Ukraine's gas transit system in Brussels.

    She said Ukraine could expand its gas transit system to meet the energy needs of Europe and that it is not wise to invest billions of U.S. dollars instead in alternative transit projects in times of financial crisis.

    "The expansion of Ukraine's gas system, which has a great technical potential with excellent infrastructure, doesn't require a huge amount of investment. It's economically viable for the whole gas system in Europe," she said.

    With 5.5 billion euros of investment, the capacity of the Ukrainian gas transit system could be increased by 60 billion cubic meters per year, said Tymoshenko.

    The current Ukrainian gas transit system has a capacity of 140 billion cubic meters per year. Ukraine transited some 120 billion cubic meters of gas to Europe in 2008.

    Tymoshenko said before the modernization of its gas transit system, Ukraine needs guarantees from the EU and Belarus for long-term transit of Russian gas to Europe.

    "If we invest 5.5 billion euros in increasing transit capacity, then we need to be sure that gas transit will go via Ukrainian territory, using full Ukrainian capacity," she said.

    In a declaration signed by Ukraine, the European Commission as well as three financial institutions, Ukraine pledges to carry out reforms to ensure the sustainability, reliability, efficiency and transparency of its gas transit system, including the independence of the gas transit operators.

    The European Commission, together with the European Investment Bank, the European Bank for Reconstruction and Development, and the World Bank, have promised to fund the modernization of Ukraine's gas transit system.

    They have agreed on the establishment of a technical coordinating unit within Ukraine's Naftogaz company to oversee the modernization projects.

    Ukraine currently transits 80 percent of EU's gas imports from Russia, or 20 percent of the EU's total gas consumption. A dispute between Ukraine and Russia in January led to disruptions of gas supply in several EU member states.

    European Commission President Jose Maunel Barroso said the gas transit system across Ukraine is one of those vital energy arteries that keeps the European body functioning. "It has been essential for many years and it will remain of strategic importance for the EU, Ukraine and Russia for decades to come."

    "It is in the common interest of everyone here today therefore that this network functions efficiently, reliably and transparently into the future. It is a system which supplies gas to 16 European countries -- 12 of which are EU member states. We cannot afford for it to become -- very frankly -- an unreliable conduit, as it was for a few dark weeks in January," said Barroso.

    The EU-Ukraine project drew fire from Russia.

    Russian Energy Minister Sergei Shmatko told the conference that the exclusion of Russia from the modernization of Ukraine's gas transit system is "intolerable."

    "It is surprising that the text (of the declaration) does not make a single reference to Russia as a gas supplier and as a strategic partner for the EU and Ukraine in this field," said Shmatko.

    He said the Ukrainian system was part of the former Soviet gas transit system and has "organic links" with Russia. "Any process involving the modernization of the gas transit system in Ukraine would be left in a void in the absence of close coordination with Russia," he said.

    Shmatko said Russia is ready to be involved in the modernization of Ukraine's gas transit system, including the provision of finance. Ensuring reliable long-term gas supplies to Europe is a key priority of Russia in its cooperation with the EU in the energy sector, he said.

    The "unilateral" nature of the declaration gives causes for concern and puzzlement, said Shmatko. "A unilateral approach, not taking on board suppliers' interests, would lead to a skewed system and the whole system would need to be radically reviewed."

    Such a system would damage EU's energy security while Russia's participation would be a benefit for all sides, he argued.

    "The main goal of cooperation, in our view, is to ensure a long-term balance of the interests of all sides and to ensure guarantees of the supply of Russian gas to EU territories," he said. The exclusion of Russia is "quite intolerable," he added.

    Shmatko also pointed out that the expansion of the Ukrainian gas transit system envisaged by the declaration is not in line with the principle of diversification of energy sources.

    Later on Monday, both Tymoshenko and Barroso were trying to address Moscow's concerns, saying Russian involvement would be welcome.

    Barroso attributed the lack of Russian involvement in the conference to the fact that it was planned well before the January gas crisis. "If Russia wants to join, it's most welcome," said Barroso.

Editor: Yan