Europe suffers gas cuts after Russia move
Updated: 2006-01-02 10:08
MOSCOW (Reuters) - European countries were enduring reduced gas supplies at the height of winter on Monday after Russia halted its deliveries to Ukraine, stirring fears about the use of energy as a political weapon.
Russia, taking over the G8 chairmanship for the first time this month and aiming to promote itself as a reliable energy source, cut its neighbor's gas supplies on Sunday after Kiev refused Moscow's demand for a fourfold price rise.
A gauge is seen at a Ukrainian main pipeline in the village of Boyarka near the capital Kiev January 1, 2006. [Reuters]
Moscow said it had no choice but to act after Kiev refused to sign a new contract that would have ended the preferential price treatment of the Soviet era.
Washington stepped into the row, the State Department saying it regretted Russia's move.
"Such an abrupt step creates insecurity in the energy sector in the region and raises serious questions about the use of energy to exert political pressure," State Department spokesman Sean McCormack said in a statement.
Pipelines taking Russian gas to European countries cross Ukraine, and the cut in supplies to Ukraine quickly affected central Europe, with Austria, Hungary and Poland all reporting sharply reduced deliveries.
The Kremlin says the dispute is a purely commercial matter. But Kiev sees it as an attempt to undermine its pro-Western government and says cutting Ukrainian supplies will undermine deliveries passing through the same pipeline complex to Europe.
Western Europe, where demand is near peak levels because of freezing weather, imports 25 percent of its gas from Russia, most of it delivered by pipelines running across Ukraine.
The Russian state monopoly, Gazprom, said enough gas was still being piped via Ukraine to meet its commitments to other countries, and if they were not getting all their gas, Ukraine must be diverting it.
AUSTRIAN SUPPLY DROPS
The Austrian oil and gas group OMV said Russian gas supplies had dropped overnight and were now down by about one third, but that it could use reserves to cover the loss.
Hungary's gas wholesaler MOL said its Russian deliveries via Ukraine had fallen by more than 40 percent. It had already told big consumers to switch to oil where possible and said it would cut deliveries to Serbia and Bosnia by more than 40 percent. Poland said its supplies were down by 14 percent.