Gazprom warns move may again lead to Europe gas supply disruptions

KIEV, June 22 - Yulia Tymoshenko, who is likely to become the next prime minister, said Thursday the government will work hard to re-negotiate a controversial natural gas agreement signed between Ukraine and Russia in January.

Gazprom, Russia??™s state-controlled gas giant, has angrily reacted to the idea and warned it may trigger a crisis in relations with Ukraine leading to European gas supply disruptions.

Gazprom and Naftogaz Ukrayiny, the national oil and gas company, signed the agreement on Jan. 4 to end the escalating dispute that had led to brief disruptions in gas supplies throughout Europe.

???These gas supply relations require a deep revision and review,??? Tymoshenko said in Parliament after three pro-Western groups had declared to soon appoint the new government.

Tymoshenko has always been critical of the agreement, but comments on Thursday carry a specific weight as the door is now open for her taking the post of the prime minister.

Tymoshenko??™s party, joined by President Viktor Yushchenko??™s Our Ukraine and the Socialist Party control 243 seats in 450-seat Parliament and will soon move to form the new government.

Yushchenko will probably submit Tymoshenko??™s nomination to Parliament by Tuesday, which means she may be approved as the prime minister as soon as next week.

In the January agreement, Naftogaz agreed to a 90% hike in Russian gas prices to $95 per 1,000 cubic meters, while Gazprom agreed to a 40% hike in transit costs to $1.6 for shipping 1,000 cu m for a distance of 100 km.

The agreement also made RosUkrEnergo, a Swiss-registered natural gas trader that is thought to be controlled by Gazprom, as Ukraine??™s only supplier of natural gas for the next five years.

Media reports suggested that RosUkrEnergo may be owned by people that represent powerful Russian political figures and possibly even organized crime leaders. RosUkrEnergo denied the reports.

Sergei Markov, a Russian political analyst linked to the Kremlin, said the revision of the agreement would probably lead to a full-scale natural gas conflict that would have repercussions on Europe.

???If Tymoshenko moves to revise the gas agreement with Russia, I think this, with a high probability, will mean full-scale gas war that will cover the entire Europe,??? Markov said in comments carried by Interfax.

Sergei Kupriyanov, a spokesman for Gazprom, agreed. ???This is just another alarm bell for European countries,??? Kupriyanov said. The revision of the gas agreement ???is the way towards a new gas supply crisis,??? he said.
Russia moves about 80% of its gas exports to Europe via gas pipelines in Ukraine, while Europe depends on Russia for a quarter of its overall gas needs.

After experiencing gas disruptions in January, many Eastern and Central European countries have been jointly seeking ways of reducing their dependence on Russian natural gas.

Poland and Ukraine have been calling since March for the creation of a separate organization in Europe that would protect energy security in the region. (tl/ez)