Russian minister slams draft EU-Ukraine gas declaration (Extra)

Mar 23, 2009, 10:00 GMT

Brussels - Russia's energy minister on Monday accused the European Union and Ukraine of going behind his country's back and putting Europe's energy supplies at risk by drawing up a joint declaration on modernizing Ukraine's gas transit network.

'A unilateral approach, not taking on board suppliers' interests, would lead to a skewed system. The system would have to be radically reviewed, which could lead to serious damage to the EU's energy security,' Sergei Shmatko told a conference on modernizing Ukraine's gas transit system in Brussels.

'The unilateral nature of the (draft) declaration gives (us) cause for concern and puzzlement,' he warned.

One fifth of all the natural gas consumed in the EU flows through Ukraine's 13,500-kilometre network of gas pipelines, but experts say that that network will need some 2.5 billion euros (3.4 billion dollars) in investment over the next six years just to keep pipes and pumping stations in running order.

Monday's conference, jointly hosted by the Ukrainian government and the EU's executive, the European Commission, was called to pave the way for that investment by listing a series of reforms aimed at bringing more transparency and efficiency to Ukraine's gas network.

At the end of the conference, the two hosts were set to sign a joint declaration pledging to implement those reforms.

But Shmatko warned that the decision not to include his country - the source of the vast majority of the gas which passes through Ukraine to Europe - in the drafting of the joint declaration could create series legal and technical difficulties.

In particular, he said that any technical work on the Ukrainian pipelines would have to be matched by technical work in Russia.

And he said that his country was concerned that the EU-Ukraine deal could call into question his own country's long-term contracts with Ukraine, and perhaps lead to an increase in transit fees - something which he warned would be 'quite intolerable.'

Russia and Ukraine clashed bitterly over gas transit fees and contracts in January in a spat that shut off gas supplies to Europe for two weeks, and which was only ended when the EU sent monitors to oversee the pipeline network.

Those monitors' task 'would be thrown into question if Russia were left on the sidelines,' Shmatko warned.