Russia-Ukraine gas dispute cuts supplies to Croatia

Russian gas flows to Croatia have fallen by 7 percent because of the deepening row between Moscow and Kiev.

Russia-Ukraine gas dispute cuts supplies to Croatia

Russian gas flows to Croatia have fallen by 7 percent because of the deepening row between Moscow and Kiev that has placed more strain on natural gas supplies to Europe, Croatia's pipeline operator said on Monday.

Russia cut off gas supplies to Ukraine on Jan. 1 in a dispute over debts and pricing that has again placed Russia's reputation as a reliable gas supplier under scrutiny. Supplies to several European countries have already fallen as a result.

Russian gas export monopoly Gazprom said Ukraine had shut down a station supplying gas to the Balkans. Chief Executive Alexei Miller will meet Prime Minister Vladimir Putin later on Monday for talks on the dispute, a government spokeswoman said.

The European Union, which receives about a quarter of its gas from Russia, has called an emergency meeting of envoys for 1400 GMT on Monday in Brussels. Gazprom's deputy chief executive, Alexander Medvedev, is also in Paris for talks.

Moscow, long at odds with Ukraine over its neighbour's ambition to join NATO, has accused Kiev of stealing gas intended for Europe, but Ukraine has alleged Russia was cutting flows by more than half through a key export pipeline.

Gazprom said in a statement Ukraine had sent a letter threatening to "confiscate transit", accusing Kiev of taking 25 million cubic metres of gas destined for European countries between Jan. 3 and Jan. 4.

"At the same time it has shut down the Orlovka Compressor Station which supplies gas to the Balkans," Gazprom said, without naming volumes.

Ukrainian state energy company Naftogaz was not immediately available for comment.

Croatia, which imports 40 percent of its annual gas needs, most of it from Russia, followed the Czech Republic, Turkey, Poland, Hungary, Romania and Bulgaria in saying deliveries had been affected by the row.

"Imports of Russian gas have been reduced by 7 percent. However, it does not affect supply to consumers as the situation in the system is stable," Ivana Markovic, a senior official with Croatian pipeline firm Plinacro, told state television.

Higher oil prices

A similar gas row briefly disrupted supplies to Europe three years ago. That crisis prompted calls for the European Union to diversify its energy supplies, but it has struggled to break its reliance on Russia.

Worries about the impact of the row on fuel supplies, coupled with the conflict in the Middle East, helped drive oil prices up nearly 3 percent on Monday. Any gas shortages could drive up demand for oil products.

Gazprom said it was honouring its commitments to customers and was supplying additional gas through Belarus and the Blue Stream pipeline as well as from its reserves in European underground storage.

Turkey's Energy Ministry said the country had raised supplies of Russian gas via the Blue Stream pipeline under the Black Sea to compensate for a slight decline in supplies via Ukraine.

Pressure on Hungary's natural gas pipeline, which ships Russian gas via Ukraine, remained below the contracted level on Sunday but gas shipments are in line with contracted volumes, GSZ Foldgazszallito Zrt, the gas transmission subsidiary of MOL , said in a statement.

With no negotiations in sight, both Russia and Ukraine have said they would bring cases against each other in a Stockholm arbitration court that deals with international commercial disputes.

Reuters
Last Mod: 05 Ocak 2009, 12:22
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