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WRAPUP 1-Gazprom takes swipe at Europe for unequal treatment

Published 06/25/2009, 11:49 AM
Updated 06/25/2009, 11:57 AM
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* Gazprom says Europe hindering its pipeline projects

* Ukraine, Russia to meet Europe, banks on Monday

* Meeting may solve storage dispute as June payment looms

By Simon Shuster

MOSCOW, June 25 (Reuters) - Russia's Gazprom took a swipe at the European Union on Thursday for discriminating against its pipeline projects, just days before the two are to meet Ukraine to discuss a festering payment dispute.

The head of Gazprom's foreign department, Stanislav Tsygankov, told a conference attended by a senior European energy official that Brussels was unfairly supporting the Nabucco pipeline while hindering Russian projects at every step. "We are very concerned about this, about the clear inconsistency of the EU leadership's approach to the actions of our firms, which are aiming to ensure their supplies," he said.

Tsygankov's speech summed up the EU's attitude with an allusion to George Orwell's novel Animal Farm. "It appears that all animals are equal, but some are more equal than others," he said.

In her own speech before the conference, the European official, Marjeta Jager, said she agreed with Tsygankov on the importance of securing European demand for Russia's gas, but did not mince words in defending Europe's position.

"Let me set the record straight. Reputation matters in Europe," said Jager, the European Commission's director of general affairs and international energy relations.

The exchange showed the wounds from Russia's January gas conflict with Ukraine, which saw millions of Europeans cut off from fuel supplies in the dead of winter, are far from healing.

Talks to resolve the latest sore point in relations between Moscow and Kiev -- paying some $4 billion to fill Ukraine's gas storage facilities -- are therefore not likely to be easy.

But Jager said that she hoped a resolution would be found on Monday, when officials from Gazprom and Ukraine's Naftogaz are to meet in Brussels with international banks and EU officials to resolve the payment issue and avoid another gas crisis.

"We are looking now to Russia and Ukraine to restore the confidence...which was badly damaged in the last crisis."

UKRAINE'S GAS BILL

But even if Monday's meeting solves the issue of gas storage, Ukraine's ability to pay for its own gas supplies for June is still not certain. A failure to pay may yet result in another shut-off of the kind that European, Russian and Ukrainian leaders have been warning about.

The Ukrainian president's energy envoy said on Thursday that state energy company Naftogaz needed to scrape together $120 million by July 7 to pay last month's bill for Russian gas.

"The date of July 7 is approaching when payment must be made for gas received in June," energy envoy Bohdan Sokolovsky said. "The funds gathered by Naftogaz are not sufficient."

Jager said that Sokolovsky has been invited to attend Monday's meeting in Brussels, along with Russian Deputy Energy Minister Anatoly Yanovsky, Gazprom's export chief Alexander Medvedev and the head of Naftogaz, Oleh Dubyna.

Asked by Reuters if she was confident that the meeting would resolve the gas storage issue, she said: "Everyone hopes that the problem will be fixed. We do not want another gas crisis."

For the long term, Russia hopes to settle its bitter energy relationship with Ukraine by building pipelines that go around its former Soviet neighbor, which now transports almost all of the Russian gas meant for Europe.

Europe, meanwhile, is trying to cut both Russia and Ukraine out of the equation by building the Nabucco pipeline, which could bring Central Asian gas directly to Europe.

Tsygankov said that European regulators are therefore blocking the progress of Russia's projects.

"Nabucco is getting the green light everywhere ... while our gas transport projects, South and North Stream, are constantly facing regulatory barriers."

(Editing by Keiron Henderson)

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