Brussels, 11/04/2014 (Agence Europe) - The European Union rejects the use of energy for political purposes and expects its suppliers to “respect their commitments”, the European Commission warned on Friday 11 April.
Could a gas war (still) ensue? In a letter sent to 18 European leaders the previous day, Russia's President Vladimir Putin threatened to stop supplying gas to Ukraine if this country does not settle its debt. This would also jeopardise the gas supply to the EU - as in 2009.
The Commission does not want to be intimidated. “The European Union is a good client. It buys 70% of Russia's energy exports which make up about 50% of income of the Russian federal budget”, said a spokesperson for the Commission, Pia Ahrenkilde-Hansen. “We expect our suppliers to keep their commitments and it is in everyone's interest not to use energy as a political tool”, she stated, recalling the position given by High Representative of the EU for Foreign Affairs and Security Policy Catherine Ashton and US Secretary of State John Kerry (see EUROPE 11052).
“We guarantee total respect of our obligations towards European consumers. The issue is guaranteeing transit through Ukraine”, Putin immediately stated during a meeting of the Russian Security Council, as quoted by press agencies.
The EU Foreign Affairs Council in Luxembourg on Monday 14 April (see other article) will address this issue as part of its discussions on the Ukrainian crisis.
Commission says gas reserves are at adequate levels. The purchase of gas from Russia covered 25% of EU countries' needs and was worth €35 billion in 2013 - in other words €3 billion per month - the Commission states. “The supply of gas from Russia is currently taking place completely normally” said Sabine Berger, the spokesperson for European Commissioner for Energy Günther Oettinger. In Berger's opinion, Russia ought to respect its gas commitments - as should Ukraine as a transit country.
“The reserves of gas stored in the EU are at adequate levels: 37 billion m3, in other words half the storage capacity that we have at our disposal. The member states have begun to be re-supplied. What is more, we have mechanisms that could be activated in case of disruption to supply”, said Berger.
Using the lessons learned from the gas crisis in 2009, the EU has taken measures to improve supply security (strengthened inter-connectivity between member states, increased possibilities of reverse flows in the network). Reverse flows mean that gas can go in two directions and not just one - which enables member states to help each other should the need arise. The EU has also equipped itself with rules to ensure that gas companies can guarantee supply to households for 30 days - including in the harshest of winters. The EU countries are obliged to work on emergency plans so that they are prepared for any possible serious disruptions to supply. A European gas coordination group meets regularly to review the supply security (see EUROPE 11057).
The Commission admits that efforts still need to be made to improve inter-connectivity and the options for reverse flows. In countries like Bulgaria, efforts are under way to improve reverse flows, a source close to Oettinger told EUROPE. This is the reason why, in 2013, the Commission created a list of 248 infrastructure projects of common interest - including a large number of projects linked to gas.
The 13 EU countries concerned by Russia's threats are Austria, Bulgaria, Croatia, the Czech Republic, France, Germany, Greece, Hungary, Italy, Poland, Romania, Slovakia and Slovenia. Five other non-EU countries are also concerned - Bosnia and Herzegovina, the former Yugoslav Republic of Macedonia, Moldova, Serbia and Turkey.
Ukraine consumes 50 billion m3 of gas per year. It produces 20 billion m3 and buys the remaining 30 billion m3 from Russia. Its network of gas pipelines ensures the transit of 65 m3 of the 133 billion m3 of gas purchased by the countries of the EU, according to European Commission data for 2013.
In his letter to the 18 European leaders, Putin recommends holding “consultations without delay at the level of ministers for the economy, finance and energy in order to set up joint measures for stabilising the Ukrainian economy and in order to ensure the supply and transit of Russian gas in strict respect of the contractual conditions”. He recalled that, for the last four years, Russia had “subsidised the Ukrainian economy” to the tune of over $35 billion, and demanded that support now be made “on an equal footing”. In particular, Kiev has accumulated unpaid invoices of $2.2 billion for Russian gas and refuses the 80% increase in tariff that was decided upon by Moscow.
As regards the South Stream gas pipeline project which is due to link Russia to Western Europe without passing through Ukraine by 2015, the Commission believed that it was “not a priority project”. “We want to reach new countries that ensure supply in order to ensure diversity. We are particularly thinking of the southern corridor for gas. Any new gas pipeline is a good thing if it is in full conformity with European law”. On South Stream, account needs to be taken of relations between Russia and the EU, added the Commission. A working group was set up in January to define the necessary legal framework for the European part of South Stream, “but there are no negotiations as such on South Stream”, said Berger.
Reverse flows to help Ukraine. The Commission recalled that it was working with Ukrainian and Slovakian companies to ensure that the memorandum of understanding on reverse flows is signed as soon as possible after Easter. Finalising these negotiations could enable Ukraine to receive up to 8 million m3 of gas every year, in addition to what it receives from Hungary and Poland. “This option is completely in accordance with European law”, stated the Commission. (LC)