ANALYSIS: Gas feud met with chill in Europe

By Stefan Nicola UNITED PRESS INTERNATIONAL | Thursday, January 8, 2009

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BERLIN -- Russia's gas price row with Ukraine escalated Tuesday, disrupting deliveries to Europe as the continent is experiencing a bitterly cold winter.

Alexander Medvedev knows he needs to soothe his best customer. The No. 2 at the Russian energy giant Gazprom arrived in Berlin on Tuesday to meet with German Economy Minister Michael Glos and a representative from the Czech presidency of the European Union.

Whether Mr. Glos extended a warm welcome to Mr. Medvedev is unknown -- but Berlin certainly didn't. It was 5 degrees Fahrenheit in the German capital, and across most of Europe, temperatures were similarly grim, with snow and ice shutting down highways and delaying air travel.

Just as Europe was being hit by a cold spell, the gas price row between Russia and Ukraine escalated, with several European nations reporting a drop in gas deliveries. The European Union imports roughly a quarter of its gas from Russia, some 80 percent of which is pumped through Ukraine.

Russia announced Monday it would reduce gas sent through Ukraine by 65.3 million cubic meters, the amount Gazprom said Ukraine stole between Jan. 1and Jan. 4.

The Russian energy giant earlier had stopped the gas intended for Ukraine only, because Kiev refused to agree to Russian price hikes.

But Ukraine said Russia reduced the gas flow by much more -- 200 million cubic meters -- and added Ukraine's state gas firm Naftogaz would divert only as much gas as necessary to keep its generators running.

Russia instead accused Ukraine of having shut down three of four pipelines that deliver gas to Western Europe. Gazprom said Kiev, and not the Kremlin, should be blamed for the drop in deliveries to Europe.

No matter who is to be blamed, officials are furious.

The Czech EU presidency issued a statement demanding "that gas supplies be restored immediately to the EU."

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