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Putin Says Ukraine-EU Gas Plan 'Unprofessional'

March 24, 2009

(RFE/RL) -- Russian Prime Minister Vladimir Putin has said a gas plan presented by Ukraine to the European Union is "ill-considered and unprofessional."

Putin's comments came after the EU promised 2.5 billion euros on March 23 to help upgrade Ukraine's aging gas-pipeline network in exchange for a pledge from Kyiv for greater transparency in its energy sector.

Speaking to reporters in Sochi, Putin said Moscow would have to review its relations with European partners should its interests be ignored in continued talks between the EU and Ukraine over gas supplies.

"The document that we're talking about is ill-considered and unprofessional at the least, because discussing this kind of question without the main supplier is simply not serious," Putin said.

'Clarify The Consequences'

In further comments, Putin -- presiding with Russian President Dmitry Medvedev over a Russian Security Council meeting in Moscow -- announced that scheduled talks with Ukraine next week would now be suspended, while Russia reviews the terms of the EU-Ukraine agreement.

"We had planned to hold intergovernmental consultations at the prime ministerial level next week. I suggest we consider postponing these consultations," Medvedev said, "so we can clarify the consequences of the adoption of this [EU-Ukrainian] declaration and analyze the decisions that have been made."

It is the latest wrinkle in a permanently rocky relationship between Russia and Ukraine over energy supplies to Europe. A pricing dispute between Kyiv and Moscow brought European gas deliveries to a halt in January, and remarks like Putin's are a reminder that Moscow sees itself as a critical partner in any energy talks.

The EU gets 25 percent of its natural gas from Russia -- some 80 percent of which is pumped through pipelines transiting Ukraine. But those pipelines are 40 years old -- already several years past their life expectancy, and badly in need of repair or replacement.

Ukraine does not have sufficient funds to do the work by itself, hence the agreement with the EU.

Better Choice

Russian companies, however, believed they were the better choice to be Ukraine's partner in modernizing the pipeline network -- despite the fact that Kyiv has signaled for years it is not interested in Russian firms buying up any shares in its pipeline network.

Russia's Gazprom argues that it is upgrading the pipeline system on its own territory, and that it should help do the same in Ukraine for reasons of compatibility.

Being left out of the modernization project appears to be only part of Moscow's complaint. What really seems to have angered Russia is the fact that there was almost no mention of Russia's role as supplier of the gas headed to Europe in the EU-Ukrainian declaration.

"It is surprising that the [EU-Ukrainian] declaration makes no mention of Russia as a supplier of gas, as a strategic partner of Europe and Ukraine in this sphere," said Russian Energy Minister Sergei Shmatko.

"The exclusively bilateral nature of the joint declaration by the EU and Ukraine is unexpected and perplexing," he continued. "As a matter of fact, the Ukrainian gas transit system, as part of the unified gas supply system of the former Soviet Union, is technologically linked with and dependent on Russia's gas transit system and supply base."

'Vital Energy Arteries'

But EU leaders see the deal with Ukraine as benefitting Russia, since the upgrade of Ukraine's pipeline system helps ensure the reliability of receiving Russian gas supplies.

"The gas transit system across Ukraine is one of those vital energy arteries that keeps the European body functioning," European Commission President Jose Manual Barroso said in Brussels on March 23. "It has been essential for many years, and it will remain of strategic importance for the European Union, Ukraine, and Russia for decades to come."

Ukrainian Prime Minister Yulia Tymoshenko, whose meetings with Putin in January helped end the gas crisis at the start of this year, said on March 23 that she believed Russia would support the EU-Ukrainian agreement.

"The declaration gives a signal to all potential investors who want to join this process that this process is supported by Europe, supported by Ukraine, and certainly supported by the Russian Federation," she said.

That was not the message coming from Moscow on March 24 as a still irate Putin railed about the deal signed in Brussels.

"It's clear that gas can come only from Russia," he said. "But nobody has discussed this issue with us."

Source: http://www.rferl.org/content/Putin_Says_UkraineEU_Gas_Plan_Unprofessional/1516089.html

Copyright (c) 2009. RFE/RL, Inc. Reprinted with the permission of Radio Free Europe/Radio Liberty, 1201 Connecticut Ave., N.W. Washington DC 20036.

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