Russia's Gazprom warns Ukraine over pipeline plan

14:00, 26 March 2009
World
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Ukraine has called...

Russia`s Gazprom (GAZP.MM) warned Ukraine against implementing plans to modernise its pipelines without consulting Moscow, saying any such action would immediately affect gas supplies to Europe, according to Reuters.

Ukraine has called on the European Union, which gets most of its imported Russian gas via Ukraine, to help fund modernisation of its pipeline system. The proposal has angered the Kremlin and Russian Prime Minister Vladimir Putin has said Moscow could review its ties with the EU if its interests are ignored.

Gazprom, Russia`s gas export monopoly, said late on Wednesday that any changes to Ukraine`s pipelines, built as part of a single Soviet-era system also including Russia, would need the company`s approval or risk disrupting gas production and output across Eurasia.

"Unapproved change in the Ukraine gas pipeline system`s operations will immediately affect not only export supplies but also the production process of Russian and Central Asian gas and may entail unpredictable consequences for the whole Eurasian territory," Oleg Aksyutin, head of Gazprom`s transportation department, said in a statement.

Neither Putin nor other Russian officials, have said what exactly they dislike about Ukraine`s plan but analysts say it could diminish Russia`s importance as a global energy supplier and potentially damage Gazprom`s profits. [ID:nLP440592]

Relations between Moscow and Kiev over gas have long been strained due to disagreements over prices and payments. This latest dispute has revived fears of a repeat of January`s three-week stand-off that left millions in Europe without gas in the dead of winter.

Gazprom, the world`s largest gas producer, supplies Europe with a quarter of its gas. Around 80 percent of this comes through Ukraine`s pipelines.

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