Brussels, 30/12/2005 (Agence Europe) - The European Union does not want to get involved in the dispute about natural gas prices between Russia and the Ukraine in recent weeks, but it is indirectly involved because around a quarter of the natural gas consumed in the EU is imported from Russia, mostly via the Ukraine.
Eurogas, the European federation of EU gas industries, explains that natural gas accounts for 23.7% of final energy consumption in the EU, compared with 44.7% for oil and 19.4% for electricity. Not including Cyprus and Malta, the EU consumed 456 billion m3 of natural gas in 2003 which came from the following areas: Europe (including Norway) 61%, Russia 24%, Algeria 11% and other countries 4%. Eurogas forecasts that EUR25 gas consumption will rise to between 525 billion and 560 bn m3 in 2010, and between 590 bn and 640 bn m3 in 2030, but Europe's share of gas production will diminish (hence increasing energy dependency).
In its dispute with the Ukraine, Russia has rejected all Ukraine's proposals in talks on the price of Russian gas in Moscow in recent days, explained Ukrainian President, Yuri Ekhanourov, on 30 December. He said the Russians had come up with new ideas, like replacing Ukraine's gas imports from Turkmenistan with imports from Russia, but Ekhanourov hinted he did not favour this proposal because Ukraine is happy with the conditions set for their gas imports from Turkmenistan.
Ukraine and Russia have been at serious loggerheads for several weeks now over the price of Russian gas imports. The Russian monopoly Gazprom wants to raise the price four-fold from 1 January 2006 to between USD 220 and USD 230 per thousand cubic metres, threatening to cut off supplies to Ukraine if it refuses to accept the new prices. Kiev says this price hike is unacceptable, wanting a gradual price increase instead. The Ukrainian prime minister Yuri Ekhanourov said on Friday that the Russian President, Vladimir Putin, opposed the idea of cutting off gas supplies to Ukraine from 1 January 2006.