Gazprom charm offensive seeks to reassure the West

Last winter's stand-off between Russia and Ukraine that led to Ukraine's gas supply being briefly cut off will not be repeated this winter, according to a senior official of the Russian state majority-owned company, Gazprom. Alexander Medvedev, a deputy chairman of Gazprom and head of its export arm, Gazexport, said Russia had already concluded a five-year transit agreement with Ukraine and that talks on supplies for the coming year were already well advanced.

He said negotiations had been proceeding well, even before Viktor Yanukovych was nominated Ukraine's next prime minister earlier in the summer. Mr Yanukovych, whose nomination followed a series of failed attempts by President Viktor Yushchenko to form an "orange revolution" coalition, is leader of the grouping regarded as more friendly to Russia. Last winter's breakdown of talks on gas supplies was widely seen as a move by Russia to "punish" Ukraine for its pro-Western policies.

Speaking to an international group of academics and journalists in Moscow yesterday, however, Mr Medvedev was concerned to quash any idea that Gazprom's one-day halt to supplies resulted from anything other than a straight commercial dispute, for which Ukraine was to blame. He also repeated accusations that Ukraine had been "stealing" Russian gas and had diverted supplies intended for Europe, when the supply had been switched back on.

Mr Medvedev was also concerned to allay fears that Russia might give preference to the Asian market if Europe tried to put pressure on Russia in future, or set conditions. Mr Medvedev said there was no prospect of this, because "we have contracts" that Gazprom respected. He also said the times were gone when Russia would develop oilfields and construct pipelines without contracts for purchases in advance. It was only in the Soviet Union where reserves were developed without a real market, he said.

He forecast that, whatever European countries said, their demand for Russian gas would only grow, and that Russia's share of the European market was likely to increase from 26 per cent to at least 33 per cent. It was simply not realistic for Europe to exclude Russia as an energy supplier, because there were no realistic alternatives. And even if Europe reduced its demand overall, Russia's market share would at least remain stable or - more likely - rise.

Mr Medvedev's lengthy explanations and assurances were the latest attempt by Moscow to reassure Europe that it remains a reliable supplier. As such, it demonstrates the continuing damage inflicted by the dispute with Ukraine.