Image: Russia gas
Sergei Chuzavkov  /  AP
A gas pressure gauge indicating zero is seen at a snow-covered transit point on the main pipeline from Russia in the village of Boyarka near the capital Kiev, Ukraine, on Saturday.
updated 1/3/2009 1:28:45 PM ET 2009-01-03T18:28:45

A top Ukrainian official warned Saturday that European customers could see serious natural gas disruptions in two weeks unless an energy dispute between Russia and Ukraine was resolved, and the Russian gas monopoly Gazprom accused Ukraine of boycotting contract negotiations.

As Russia and Ukraine traded accusations in their bitter dispute over energy prices, four European nations — Romania, Hungary, Poland and Bulgaria — all reported some supply drops in natural gas Saturday.

Gazprom cut off gas shipments to Ukraine on Thursday. Then Gazprom and Ukraine embarked on dueling charm offensives, both trying to assure western European nations that they were reliable energy partners and the fault lay with their rival.

The Russian delegation hoped to convince investors in Prague, Paris, Berlin and London that Kiev is to blame for any gas shortages, saying Ukraine is siphoning off natural gas from Russian shipments, as well as refusing to pay $600 million in fines or negotiate a new price contract for 2009.

Russia supplies Ukraine with natural gas and also sends 80 percent of its gas supplies to Europe through pipelines in Ukraine. The stakes in the dispute are high because Europe relies on Russia for a quarter of its gas needs — and because heat is crucial in the biting northern European winter.

Meanwhile, an economic aide to Ukrainian President Viktor Yushchenko warned that serious disruptions could hit Russia's European customers if Russia continues to refuse to ship gas allocated for Ukraine to Ukraine.

Bohdan Sokolovsky said even though Ukraine continued to pump Russian gas destined for Europe, European countries could see major shortfalls in 10 to 15 days.

Without Ukraine's share of gas in the shipment from Russia, the overall gas levels in the pipeline transit system begin to fall. Sokolovsky said if that continues, an automatic shutdown will be triggered because the system requires a minimum amount of gas to maintain pipeline pressure.

'We're not negotiating'
"It is obvious that this is political pressure on Ukraine," Sokolovsky said of Russia's gas cutoff. "This is pure politics."

Speaking in Prague on Saturday, Gazprom deputy chairman Alexander Medvedev said Ukraine's position was "absolutely unacceptable."

"We're not negotiating," he said. "There's nobody from Naftogaz to negotiate (with)."

Despite the gas cutoff to Ukraine, Gazprom says it has continued pumping the gas meant for Europe. Medvedev said Gazprom has been using alternative routes that don't cross Ukraine — pipelines in Belarus and Turkey — but those don't have the capacity to make up the shortfall. As a result, some European countries were seeing a reduction in supplies.

"We try to do our utmost to compensate for what Ukraine is doing ... but the capacity to compensate has its limits," Medvedev said.

Gazprom Alexei Miller later suggested at a televised company meeting in Moscow that European consumers should sue Ukraine for allegedly stealing their gas.

Ukraine, meanwhile, disputes the fines and contends that Gazprom is unfairly refusing to accept a rise in transit fees while asking for higher gas prices for 2009.

The two nations are also at odds over the price Ukraine will pay for natural gas in 2009 — Gazprom has proposed a price jump from $179.50 to $418 per thousand cubic meters.

Valentyn Zemlyansky, a spokesman for Ukraine's Naftogaz, said Saturday the company was ready to negotiate in Moscow but called Gazprom's behavior "energy blackmail." He rejected claim that Ukraine was siphoning gas, saying the country had been sacrificing its own reserves to maintain minimum pressure levels in the pipes.

Zemlyansky said as of noon of Jan. 2, Naftogaz received a request from Gazprom to pump 305 million cubic meters but it had to pump 319.3 million, or an extra 13.9 million cubic meters, just to keep the gas flowing.

"Ukraine is fulfilling all the obligations of the energy charter, in comparison to our Russian partners," Zemlyansky told The Associated Press.

Ukraine itself has enough reserves to last until early April, Naftogaz says.

EU won't mediate
Outside observers said the ramifications of gas shortages across Europe were so great that they should not be allowed to occur. Chris Weafer, chief strategist at Uralsib bank, said the spat was mainly political and would likely be resolved to avoid serious disruptions to both Russia's and Ukraine's reputations.

The European Union has urged the two former Soviet republics to find an "urgent solution" to the dispute and announced it will host a Jan. 9 meeting with Russian and Ukrainian experts to discuss natural gas shipments to the 27-nation bloc.

Still, the EU warned it would not play mediator.

"We reject being part of the dispute," Czech Deputy Prime Minister Alexandr Vondra said Saturday. The Czech Republic currently holds the bloc's rotating presidency.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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