EU needs to review energy relations with Russia, Ukraine - Solana

11:50, 11 February 2009
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"We paid a heavy price for a dispute..."

The European Union needs to review its energy relations with Russia and Ukraine in the wake of January`s natural gas row between the two countries, EU foreign policy chief Javier Solana said on Wednesday.

Russia suspended supplies to Ukraine on January 1 after the former Soviet neighbors failed to reach an agreement on a new gas contract for 2009. A week later, Gazprom cut off gas deliveries to the European Union, saying Ukraine was stealing gas intended for EU consumers.

"We paid a heavy price for a dispute between our biggest energy provider and our most important transit country. We need to review the energy relations we have with the two countries," Solana said.

He said that even though the political and economic union of 27 member states would look to diversify energy sources and supplies, the EU must secure agreements with Russia and Ukraine that would prevent a reoccurrence of January`s disruptions to supplies.

"The new agreements we are negotiating with both Russia and Ukraine will need to contain substantive elements on energy that allow us to ensure that such crises do not happen again. All those left in the cold in January are rightly expecting us [the EU] to come up with answers," Solana said.

The EU gets a quarter of its gas from Russia, 80% of which comes via Ukraine.

Solana also said that Russia and Ukraine would remain important energy partners.

"Russia and Ukraine will continue to be important energy supply and transit partners for the EU for the foreseeable future. It will, therefore, be important to forge reliable long-term energy partnerships offering security and stability for both sides," he said.

Ukraine`s Naftogaz and Russia`s Gazprom signed a gas supply and transit agreement on January 19 after the Ukrainian and Russian prime ministers, Yulia Tymoshenko and Vladimir Putin, became involved in the dispute. Under the terms of the contract, Ukraine will have to pay Russia $450 per 1,000 cu m with a 20% discount while transit fees have not been revised.

However, Ukrainian President Viktor Yushchenko said on Tuesday that Tymoshenko did not have the authority to agree the deal.

"The prime minister was not authorized to make the decisions taken as part of the Moscow agreements [on gas supplies]," Yushchenko said, adding that the deal "directly threatens the independence of Ukraine."

RIA Novosti

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