Russia pledges future gas supplies to Europe

It was the first meeting of the G8 finance ministers in the year of Russia's G8 presidency.

The Russians have decided to focus on the impact of energy markets upon the global economy at this year's G8 summit to be held 15-17 July in St Petersburg.

Russia is sitting on one of the world's largest reserves of gas.

One quarter of EU gas comes from the giant eastern neighbour, with individual countries like Germany importing over a third of their gas from Russia.

Dependency among new member states, such as Poland and Hungary, is even higher, at over 60 percent.

In January a number of European countries were hit by gas shortages when Russia blocked supplies through its export pipeline because of a dispute with Ukraine.

The developments caused a watershed in thinking on Russian energy dependency in the EU.

It also prompted requests from France among others to get Russia to ratify the Energy Charter Treaty, which would break the export monopoly held by Russian state-owned giant Gazprom. Russia has signed but not ratified this charter so far.

The Russian finance minister admitted heated discussions at the G8 meeting on this point.

"Of course all discussions between ministers tend to be rather tense. This is a clash of different opinions," the Russian finance minister, Alexei Kudrin said.

"We thoroughly analysed the task of formulating new or modernising existing energy trade rules, investment into this sector, and data transparency."

He said Russia would "ensure access to pipelines for all companies that produce natural gas in Russia" and that the companies are going to "compete in tenders for the development of new gas fields."

Gas will start flowing from the so-called Stockman deposit in the Barents Sea shelf in 2010 at an annual level of 70 to 90 billion cubic metres in several years, the minister revealed.

"The North European Gas Pipeline (NEGP) is under construction for additional gas supplies to Europe via the Baltic Sea – two legs 1,200 km each with the annual capacity of 55 billion cubic metres of gas a year," he added.

The NEGP is a joint venture under a 50-50 deal with Germany. German companies will receive gas production facilities, while Gazprom will get a share of the European gas distribution business.

"In this context we should think about additional guarantees of gas deliveries to Europe. The projects, which I have mentioned, should provide these guarantees," Alexei Kudrin said.