Russia halts natural gas delivery to Europe

January 08, 2009|By Philip P. Pan | Philip P. Pan,The Washington Post

MOSCOW - Shipments of Russian natural gas to Europe came to an abrupt halt yesterday in the middle of a winter cold spell. Russia accused neighboring Ukraine of shutting down pipelines that supply a fifth of the continent's gas, while Ukraine charged that Russia had halted all deliveries.

The situation marked a sharp escalation of a politically charged fuel-price dispute that has renewed concern about Europe's dependence on Russian gas and Ukrainian pipelines. It followed a precipitous fall in shipments Tuesday, when more than a dozen countries reported a complete stop or major drops in supplies.

The fuel disruption, which was felt as far away as France, Italy and Germany and caused cuts in electricity and heating in the Balkans, was expected to worsen as Russia deepened its gas embargo of neighboring Ukraine.

Russia and Ukraine continued to blame each other and neither seemed willing to budge on the sixth day of a standoff that began when talks collapsed and Gazprom, the Russian gas monopoly, cut all supplies to Ukraine on Jan. 1. Direct talks, however, appeared set to resume today for the first time in more than a week.

Bulgaria, Croatia, Greece, Macedonia, Romania, Serbia and Turkey said gas from Russia coming through Ukraine stopped altogether Tuesday, and 12 other countries reported major reductions. Europe's largest countries say they have reserves and access to other supplies that could last weeks, but even Germany predicted energy shortages if Russian deliveries were not restored and temperatures remained low.

Smaller countries in Eastern Europe and the Balkans appeared hardest-hit. Croatia said it was reducing supplies to industrial customers, Hungary ordered power plants to begin burning other fuel if possible, and Slovakia's gas distributor declared a state of emergency.

Bulgaria, which relies almost entirely on Russian gas, said it was in a "crisis situation," with reserves that could disappear within days, factories shutting down, two cities left without gas, thousands of households without heat and the government preparing to restart a shuttered nuclear reactor.

In Sofia, the Bulgarian capital, the central heating system was operating at reduced levels, with some neighborhoods receiving no heat at all, the national news agency Focus reported. "We are facing a serious natural gas crisis where Bulgaria is a victim of the conflict between Russia and Ukraine," Prime Minister Sergei Stanishev said, adding that priority was being given to public buildings, schools and hospitals.

The European Union, after days of statements expressing confidence in reserve supplies and reluctance to mediate in what it described as a business dispute, condemned the gas shortfalls as "completely unacceptable," adding that they occurred "without prior warning and in clear contradiction with the reassurances given by the highest Russian and Ukrainian authorities."

The Czech Republic, which holds the rotating EU presidency, said it was considering the "extreme option" of a three-way summit with Ukraine and Russia to resolve their dispute, which centers on Gazprom's demands that Ukraine pay more than $600 million in late fees on overdue bills and a higher price for gas this year.

Russia has charged Ukraine and other former Soviet republics a subsidized rate for gas for more than a decade and has insisted in recent years that they begin to move toward market-based prices. But Ukraine, which has been hit hard by the global financial crisis and is struggling to avoid an economic meltdown, says it cannot afford the increase demanded unless Russia pays more to use its pipelines.

Complicating the talks are charges of political motives by both sides. Ukrainian officials say the Kremlin is trying to weaken their pro-Western government, which is seeking NATO membership and backed Georgia in its August war against Russia. Russian officials have accused Ukraine of provoking the crisis to stir up anti-Russian sentiment in Europe.

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