Ukraine looks to Europe for gas as Russia ups pressure

Ukraine looks to Europe for gas as Russia ups pressure
# 11 April 2014 17:43 (UTC +04:00)

Baku-APA. Ukraine said on Friday it would turn to Europe for gas and won a promise of help from Brussels after Russia warned it could cut supplies over Kiev's refusal to pay Moscow's "political, uneconomic price" for supplies, APA reports quoting Reuters.

Presenting a united front a day after President Vladimir Putin wrote to the European Union warning that its supplies could be disrupted if Ukraine failed to cover its bills, European officials said they had little to fear and would help Ukraine pay.

With Russia increasing the pressure on Ukraine's faltering economy, Ukrainian Energy Minister Yuri Prodan told parliament the EU would stand in solidarity with Kiev if Russia reduced supplies, making sure Moscow could not increase flows through alternative pipelines to bypass its neighbour.

"Ukraine cannot pay such a political, uneconomic price, so now we are negotiating with the European Union about reverse deliveries into Ukraine," Prodan said.

"We will make gas purchases from reverse flows urgently. On the conditions offered by European gas companies. We plan that they will be Germany's RWE and a French gas company."

The ministry's spokeswoman confirmed the French company was GDF Suez, adding no agreement had been signed as yet.

Prodan said Ukraine needed European gas to build up its reserves as Russian gas was no longer being pumped into storage, adding Ukraine had unused capacity of 15 billion cubic metres.

Kiev has around 7 bcm in storage and says it needs 14-15 bcm to be able to guarantee transit to European consumers. Russia meets 30 percent of Europe's natural gas demand, and half of this goes through Ukraine.

Russia has nearly doubled the gas price it charges Ukraine, punishing an economy that for years was mismanaged by pro-Moscow President Viktor Yanukovich and has been in freefall since he was toppled in violent protests.

Kiev's new leaders accuse Moscow of using gas as a way of punishing them for pursuing closer ties with the EU, and the standoff has deepened the worst East-West crisis since the end of the Cold war in 1991.

Washington accused Moscow on Thursday of using energy as "a tool of coercion".

But on Friday, Kremlin spokesman Dmitry Peskov stepped up the pressure on Ukraine, reiterating that its gas debt was mounting and Kiev was failing to meet its payment obligations - a wording that could trigger the reduction of supplies.

He also criticised the EU for not responding to Putin's letter on the situation.

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