Russia acts to calm EU over its gas dispute with Ukraine

In response to international pressure, Russian gas monopoly Gazprom has boosted gas supplies to EU countries following marked drops due to a halt of gas delivery to Ukraine.

"With the aim of preventing a possible energy crisis, caused by Ukraine illegally taking gas, Gazprom has taken the decision to deliver additional gas into the gas transport system of Ukraine," the company said in a statement.

The move comes as a compensation for shortages seen in central and western Europe on Monday (2 January), the first day after Gazprom switched off its gas supplies to Ukraine following a bitter dispute over gas prices.

Several member states suffered direct consequences of the crisis, with Hungary and Poland reporting a drop of as much as 40 percent in their gas delivery.

Other central European countries, as well as Austria, France and Germany have also been hit by the reduced gas flows.

Gazprom's deputy chief executive Alexander Medvedev promised the gas supplies to Europe would be "restored in full" by Tuesday evening (3 January), but he warned "the situation in which Ukraine continues to steal gas and we continue to supply European customers can't continue indefinitely.''

While the state-owned Russian firm accused the Ukrainians of "stealing" shipments targeted to Europe, a Ukrainian gas company claims the shortages resulted from reduced pressure in the pipelines after the country's own supplies were cut.

EU caught between two parties

The EU is pressing on both Kiev and Moscow to resume gas talks, while the European Commission has called up experts from the EU member states for a special meeting on Wednesday in Brussels to discuss the potential effects on markets.

The dispute between Kiev and Moscow culminated during the last days of 2005 as Ukraine refused to pay about four times more for the Russian gas imports than currently, hinting that Moscow's move is politically motivated.

Ukraine will hold parliamentary elections in March, with its citizens deciding whether to continue the Western-oriented path kicked off by the Orange Revolution, or to elect deputies favoring closer ties with Russia.

EU diplomats are hoping Ukraine and Russia can still reach a compromise, if Gazprom agrees on a more relaxed timetable for the price increase.

No alternatives

The state-run Gazprom supplies about a quarter of gas consumed in Europe, with Poland importing 62 percent, Germany 30 percent, France about 25 percent and Italy 20 percent of their gas consumption from Russia.

About 75 percent of Gazprom's European shipments is transited through Ukrainian pipelines.

According to experts, the EU currently does not have major alternatives for its gas needs.

The Austrian presidency last week highlighted the "Nabucco" pipeline project, which would provide the transit of natural gas to western Europe from the Middle East and Central Asia via Turkey.

But the project is only planned to start in 2011.

Moreover, the European Commission has warned that Europe's dependency on gas imports is set to rise further, with Russia expected to provide the EU with around half of its imports by 2020.

Russian gas is delivered to Europe through two major pipelines from western Siberia, the southern pipeline running through Ukraine, Slovakia and the Czech Republic, and the northern one through Belarus and Poland.