Russia says it will increase amount of gas sent via Ukraine for European customers

Tuesday, January 3, 2006

MOSCOW -- Russian natural gas monopoly OAO Gazprom promised Monday to boost the amount of gas it ships to European customers through Ukraine, claiming that country was stealing gas intended for the winter-bound continent.

The state-controlled company halted deliveries to Ukraine on Sunday because Kiev had refused to meet its demands for a fourfold price increase. Gazprom said after the cutoff to Ukraine that it would continue shipping full supplies to its European customers, about 80 percent of which goes through pipelines crossing Ukraine.

Despite that promise, within hours of the reduction of gas going into the pipes, other countries began reporting pressure falloffs. Russia said Ukraine was stealing gas; Ukraine denied that and said the reduced amount of gas in the pipes made the pressure too low.

An array of European countries on Monday anxiously called on Russia and Ukraine to work out the dispute as soon as possible. About one-quarter of Europe's gas comes from Russia -- 80 percent of that via Ukraine -- and the standoff raised fears of serious gas shortages as Europe suffers through a particularly cold winter.

Ukrainian Foreign Minister Borys Tarasiuk held telephone talks with European Union foreign policy chief Javier Solana and other officials on the gas dispute and called for international experts to become involved, a ministry statement said.

Gazprom, in a telegram to the Ukrainian natural gas company Naftogaz, accused Ukraine of siphoning off 95 million cubic meters of gas a day and said it would increase the flow by that amount.

"We have taken all necessary measures for Europe to receive gas in the full quantity. By tomorrow evening full connections with Europe will be restored," Gazprom deputy chairman Alexander Medvedev said late Monday, according to Russian news agencies.

Ukraine's Westward aspirations since President Viktor Yushchenko took office a year ago have clearly irritated the Kremlin. Ukraine's Foreign Ministry alleged Sunday that the gas fight is aimed at wrecking the country's economy.

Ukraine says it does not oppose Gazprom's argument that higher prices are merited to meet world market conditions, but says an immediate increase from $50 to $230 per 1,000 cubic meters would cripple the energy-intensive heavy industries that are a keystone of its economy.

Although Russia claims the dispute is a matter of simple economics, disdain for Ukraine and its leadership is clear.

State television channel Rossiya on Sunday showed an animated film clip of an apparently dimwitted Ukrainian Cossack stealing gas from a pipeline. On Monday, Medvedev said "the president of Russia is more concerned about the problems of the Ukrainian people than their own leaders."

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