No Kremlin Guarantee of Gas to EU

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25 May 2009By Nadia Popova / The Moscow TimesRussia cannot guarantee that there will be no halts in gas supplies to Europe, President Dmitry Medvedev warned at a news conference closing an EU-Russia summit in Khabarovsk on Friday.

Further raising the specter of a new gas shut-off, Prime Minister Vladimir Putin separately indicated that the country would not extend any loans to Ukraine. Ukraine's failure to pay for Russian gas resulted in the halt of deliveries to more than 20 European countries in January.

Dmitry Astakhov / RIA-Novosti

From left, Barroso, Klaus, Medvedev and Solana attending a news conference Friday at the end of an EU-Russia summit in the Far East city of Khabarovsk.

"Russia has offered no assurances and will not offer any," Medvedev said when asked about the possible suspension of gas supplies to Europe later this year. "What for? There are no problems on our part. ... Let the one who pays for the gas offer assurances."

Adding to the tension, Medvedev said he had doubts about Ukraine's ability to pay for gas this year. "If the Ukrainian side has got the money, that's great. But we have got some doubts about the solvency of Ukraine," he said.

Ukraine currently needs about $4 billion to pump 19.5 billion cubic meters of gas into its underground reserves, Medvedev said.

Putin gave different figures later in the day, saying Ukraine needed about $5 billion.

"The gas should be pumped in now, because it will be impossible to pump it in the needed volume later," Putin said in the Kazakh capital, Astana, after talks with Ukrainian Prime Minister Yulia Tymoshenko. The prime ministers met on the sidelines of a CIS summit.

Asked to explain the discrepancy between Medvedev's and Putin's figures, Russian government spokesman Dmitry Peskov said the leaders had rounded off the figures.

Valentin Zemlyanskiy, a spokesman of Naftogaz, Ukraine's state-controlled gas monopoly responsible for filing the reserves, did not answer his cell phone Sunday.

Moscow has previously indicated that it was willing to lend the money to Kiev as an advance on gas transit fees for the next five years. But Putin said Friday that Ukrainian President Viktor Yushchenko "considers the form of payment unacceptable and nearly illegal."

"We will hardly be able to solve this problem under such a regime," Putin said, according to a transcript of his remarks posted on the government's web site.

Medvedev said in Khabarovsk that Russia wanted to help Ukraine but expected the European Union to share a considerable part of the burden. "In other words, if the talk is about loans, let's help the Ukrainian state obtain the amount of money it needs. It is not us who have problems with solvency, after all," he said, according to a transcript on the Kremlin's web site.

But Putin suggested that no loans would be forthcoming. "We have applied to the European Commission with this question" of providing financial support to Ukraine, Putin said. "We got the answer through a minister of finance, 'We have no money for Ukraine.'"

"Supplies for domestic consumers in Ukraine is a very important condition for gas transit to the European consumers," Putin said. "No one should pretend it doesn't concern him."

EU officials attending the summit in Khabarovsk expressed concerns about possible gas disruptions. "There should be no more suspensions in the gas supplies," European Commission President Jose Manuel Barroso said at the news conference. "We ask Russia and Ukraine to do everything in their power to prevent another crisis next year."

Medvedev, however, maintained that the Energy Charter -- the current legal framework that regulates energy supplies in EU countries and establishes rules for resolving disputes -- was not enough to prevent disruptions. "Ukraine ... is a member of the Energy Charter, and so what? They did what they wanted to do. They spat on the Energy Charter," Medvedev said. "It means that some other instruments are needed."

Medvedev has suggested a new energy charter that would replace the current one adopted in 1991 and signed by 51 countries. Russia signed the charter in 1994 but never ratified the document, which it now calls "outdated."

"We consider some of these ideas very useful," Barroso said, adding, though, that the EU would "rather build on existing agreements."

European Energy Commissioner Andris Piebalgs said in Khabarovsk that the EU was ready to consider incorporating some Russian proposals into the existing charter, Bloomberg reported. Russia, however, has insisted on a full overhaul of the document rather than spotty changes.

Turning to another thorny issue, the Eastern Partnership program, Medvedev said EU officials had "failed to persuade" him that it would not harm Russia's interests. "What confuses me is that some states ... take this partnership as a partnership against Russia," he said.

The Eastern Partnership program, which involves all 27 EU members as well as Azerbaijan, Armenia, Belarus, Georgia, Moldova and Ukraine, seeks free trade agreements and relaxed visa rules between the EU members and the former Soviet countries, and it promises support for political reforms in those countries. The partnership is worth at least 600 million euros ($841 million) from 2010 to 2013, according to the European Commission's web site. Russia is worried that an Eastern Partnership agreement that was signed on May 7 is an EU attempt to meddle in what it considers its sphere of influence.

"We have tried to persuade President Medvedev ... that the idea of the Eastern Partnership is not aimed against anybody and of course, not against Russia," Czech President Vaclav Klaus, whose country holds the EU's rotating presidency, said at the news conference, flanked by Barroso, Medvedev and EU foreign policy chief Javier Solana.

No progress was reached at the summit on a replacement for the EU-Russia Partnership and Cooperation agreement that expired in December 2007.