EU mobilises over gas supply crunch as Ukraine accuses Russia of "manipulation"

Representatives from all 27 European Union member states met in Brussels yesterday to discuss the implications of Ukraine's gas crisis for its Western neighbours.

Supplies of Russian gas to Ukraine were turned off on New Year's Day after talks with Russia's state-backed gas company, Gazprom, collapsed. The eleventh-hour negotiations failed because Naftogaz, the former Soviet satellite's national utility group, still owes Gazprom some $614m (£419m), despite stumping up around $1.5bn shortly before the deadline. The problem for Europe is that a quarter of its gas supplies come through Ukraine, and that country has explicitly stated that the loss of its own quota threatens deliveries destined for transit.

Germany said yesterday that it was still receiving 100 per cent of expected deliveries. Poland reported an 11 per cent fall in supply pressure at the weekend, but has filled the gap with extra gas via Belarus. Within hours of the Czech Republic reporting a 5 per cent fall yesterday, supplies were back to normal. Slovakia and Bulgaria were still seeing reductions last night, but without any official quantification of the problem. "It is very difficult to say what is happening because things are changing on an hourly basis," the energy spokesman for the European Commission said. He added: "What we are sure about is that disruptions are not at a critical level and end-consumers are in no way affected."

It is not even certain that any supply reductions result from Ukraine siphoning off gas earmarked for Europe. After Gazprom accused Ukraine of stealing 21 million cubic metres of gas at the weekend, Naftogaz hit back with the accusation that Gazprom's "technical manipulation" was behind the falling pressure. The cold weather could also be a factor in apparently fluctuating supply, according to EU sources.

Yesterday's meeting of European ambassadors in Brussels was called to exchange information on the situation. A fact-finding mission – which includes Matthias Ruete, Europe's chief energy official – arrived in Kiev yesterday and, after meetings with both Naftogaz and Gazprom, will report back to a follow-up meeting of EU envoys on Friday.

A diplomatic source said: "The aim of the mission is to have concrete information, and speak to both sides and try to push them to the negotiating table to solve the situation. Member- states consider this problem as a commercial issue still, rather than a political one, and will try to remain neutral."

The gas dispute is likely to be raised at an informal meeting of foreign ministers on Thursday in Prague. Vladimir Putin, the Russian Prime Minister, yesterday met the Gazprom chief executive, Alexei Miller, to discuss the situation and Alexander Medvedev, another Gazprom executive, was in talks with French government officials.

The geopolitical concerns, added to the intensifying Israeli conflict in Gaza, pushed up the oil price. In London, crude for February delivery was up by $4.16 to more than $48.

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