Putin warns EU over Ukraine pipeline deal[fr][de] 

In Moscow, Putin called the EU-Ukraine gas pipeline modernisation plan, announced yesterday (23 March), "ill considered and unprofessional". 

Hours before in Brussels, Russian Energy Minister Sergei Shmatko also blasted the agreement , signed earlier that day between Ukraine and EU representatives, and even warned that the plan may backfire, with serious consequences for European consumers. 

The EU-Ukraine declaration, signed with Ukraine Prime Minister Yulia Timoshenko in Brussels, pledges assistance to modernise the country's 13,500 km pipeline system. Shelving his personal conflict with Timoshenko for the occasion, President Viktor Yuschenko also attended the conference, where a Ukrainian 'masterplan' for modernising the country's gas system was presented and hailed by the European Commission. 

During his speech, Commission President José Manuel Barroso apparently irked Russia by calling Ukraine "a flagship in driving forward the Eastern Partnership initiative". Over the weekend, Russian Foreign Minister Sergei Lavrov lashed out at the EU's new Eastern Partnership, set for its formal launch on 7 May, describing the pact as an attempt by the EU to spread its "sphere of influence," a criticism which he said his country often stands accused of itself. 

Indeed, the Eastern Partnership, and in particular its energy dimension, appears to particularly irritate Russia as Moscow was excluded from the initiative. Indeed, in the event of a renewed gas row with Kiev, it would be much more difficult for Russia to blame Ukraine under conditions of improved transparency on the part of the Ukrainians. 

After the Russian delegation left the conference in a sign of protest, Russia's mission to the EU in Brussels hastily arranged its own press conference. 

"Unfortunately we found that the prepared document makes not a single mention of Russia as a principal supplier or a strategic partner to Ukraine and to the European Union as a gas supplier," Shmatko said. He added: "We are of the view that the success of the project is possible only with the active participation of all interested parties."

Shmatko saw "political motivation" in the Commission's haste to push for a deal on modernising Ukraine's gas pipeline system. He also said he had told Energy Commissioner Andris Piebalgs that the project, which he compared to a "crystal aquarium", would lead to "nothing". 

"As we understand the development of the political situation in Ukraine, this idea [by the Commission] will not be realised. Therefore, we strongly believe that somebody has been in a big hurry, with this conference, in order to use this moment of time to have this declaration signed on these principles," said Shmatko. 

Valeri Golubev, deputy chairman of Gazprom's management committee, joined Shmatko in warning that the Commission's plans to modernise the Ukrainian gas system by isolating Russia will trigger "double expenditure" at the expense of the consumer. Golubev also called for any such effort be channelled via the consortium between Gazprom and Ukrainian gas monopoly Naftogaz, in which both sides hold 50%. Additional EU shareholders could also join, he said. The consortium was set up as part of the agreement that ended the January gas crisis. 

Both Shmatko and Golubev expressed reservations regarding the idea of setting up a single entity in charge of gas transportation through Ukraine. They also described as "unrealistic" the cost estimates for the modernisation of Ukraine's pipeline system, which the EU and Ukraine valued at 2.5-3 billion euros. 

EU External Affairs Commissioner Benita Ferrero-Waldner said the signature of the EU-Ukraine declaration was "only a beginning". 

"This conference marks a crucial step in restoring confidence and confirming Ukraine's status as a reliable energy partner. You are not alone in meeting the difficult challenges we are discussing. If you keep your side of the bargain, we will keep ours," she told Ukrainian officials. 

"Our support to Ukraine today should be seen in the broader context of our relationship under the new Eastern Partnership, adopted by our member states last Friday. We seek to offer Ukraine and other countries close to our eastern borders new kinds of support, including in the field of energy. In particular I hope that Ukraine will be a major player in the multilateral track of the partnership, where energy will be a major theme," the commissioner added. 

"Energy is a cornerstone not only of the Eastern Partnership, but also of the Association Agreement we are negotiating with Ukraine. In addition to specific cooperation on energy, it is also an important component of the deep and comprehensive free trade area," Ferrero-Waldner concluded. 

Russian agency ITAR TASS quotes Russian Foreign Ministry Spokesperson Andrei Nesterenko as saying that any moves to upgrade Ukraine's gas transportation system that have not been coordinated with Russia may disrupt gas supplies to Ukraine and Europe. Nesterenko also criticised the fact that the Brussels conference did not build on Russia and Ukraine's settlement of the gas row, which ended the January crisis. 

"In January 2009, Russia and Ukraine reached long-term agreements that clearly fixed the price of natural gas and tariffs for its transit through Ukraine. These documents are designed to ensure continuous supplies of natural gas to Ukraine and to European consumers through Ukraine," said Nesterenko. 

"However, some provisions in the joint declaration adopted at the conference run counter to these long-term agreements, and may raise the price of gas for Ukrainian and European consumers. Such actions can hardly be assessed as aimed at strengthening cooperation between the European Union and Russia," the spokesperson continued. 

"Russia calls for strict compliance with the long-term contracts on a transparent and economically-justified basis," Nesterenko said.