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Last Update: Tue., Jan. 3, 2006- Dhul-Hijjah 3 - 17:15 GMT

Russia Restores Gas, European Press Slams "Bullying"

Medvedev accused Kiev of "stealing" Russian gas transiting to western Europe. (Reuters)

MOSCOW, January 3, 2006 (IslamOnline.net & News Agencies) - Russia restored gas supplies to European countries on Tuesday, January 3, after key markets felt the squeeze from a price war with Ukraine, as European newspapers slammed a "bullying" Moscow and urged a review of energy dependence on Moscow.

"We have taken all necessary measures to supply Europe with gas according to contracts," Alexander Medvedev, deputy chairman of the state-controlled energy giant Gazprom, was quoted as saying by Agence France-Presse (AFP).

He accused Kiev of "stealing" Russian gas transiting through Ukraine to western Europe after Moscow cut supplies to Kiev.

The biggest importer of gas in Germany, EON Ruhrgas, said on Tuesday that Russian gas imports had returned to normal after a disruption linked to the dispute between Moscow and Kiev.

After European importers noted drops in their supplies, Gazprom said it was raising exports by 95 million cubic meters (3.3 billion cubic feet) a day to make up the shortfall.

Austria, Croatia, France, Hungary, Italy, Poland, Romania, Slovakia all reported shortages in Russian gas imports of up to 40 percent.

Germany, Europe's biggest gas importer, also noted disruptions, although Economy Minister Michael Glos said there was no immediate cause of concern for the 17 million German households that use gas heating.

Europe imports a fifth of its natural gas from Russia via Ukraine.

A row erupted when Gazprom, which controls a third of all global natural gas reserves, demanded an immediate rise in Soviet-era gas tariffs to Ukraine.

It wants to raise the price to Ukraine from 50 to 230 dollars (195 euros) per 1,000 cubic meters (35,316 cubic feet), bringing it closer into line with market prices.

Supplies were cut Sunday, January 1, after Kiev rejected the price hike.

“Gas War”

A Gazprom operator standing at the control board of the pumping station. (Reuters)

The war of words between the two neighbors continued Tuesday, with a member of Russia's upper house of parliament, Yury Sharandin, telling Russia's NTV television -- which is owned by Gazprom -- that "it's not Russia but Europe that is losing money".

Ukraine's state energy firm Naftogaz said the Russian side had "admitted not delivering the full quantity of gas to Europe".

Energy Minister Ivan Plachkov warned Ukraine would be forced to siphon off Russian gas destined for European countries further downstream if temperatures plunged below freezing.

As its 48 million people braced for shortages, Ukraine accused Moscow of seeking to destabilize its economy, which depends on Russia for about a third of its natural gas import needs.

Russian media spoke of a "gas war", while across Europe analysts pointed to Moscow's potential power to wield its mammoth energy supplies for political purposes.

The United States warned the dispute had created "insecurity" in Europe's energy sector and criticized Moscow for its "sudden" move to cut supplies.

Arbitration

Pro-West Yushchenko has estranged Kiev from its dominant neighbor. (Reuters)

Ukrainian President Viktor Yushchenko had met with ambassadors of the EU, Japan and the US over the crisis, saying Kiev would seek international arbitration to resolve the price dispute.

Russian Prime Minister Mikhail Fradkov called on the EU Tuesday to put pressure on Ukraine.

"We ask that influence be exerted on the Ukrainian side to bring it back to lawfulness and guarantee it completely fulfill international commitments of the unimpeded transit of natural gas through Ukrainian territory to European Union countries," he said in a letter to Austrian Chancellor Wolfgang Schuessel, who took over as European Union president on Sunday, January 2.

He added Russia was ready "to fulfill strictly all existing agreements and contracts with our European Union partners in the interests of strengthening the energy security of the continent."

The European Commission urged Russia and Ukraine on Tuesday to return to talks.

"The best possible solution would of course be for the parties to the dispute to solve the conflict between themselves," a spokesman for the EU's executive told reporters.

Russian analysts believe the row may end up helping Ukraine's pro-Western president in key parliamentary elections in March, where he faces a serious challenge from Moscow-backed candidate Viktor Yanukovich.

Yushchenko triumphed over Yanukovich in Ukraine's peaceful "orange revolution" in late 2004, estranging Kiev from its dominant neighbor.

"(Russian President Vladimir) Putin.. is punishing Ukraine for not choosing the right president," Vladimir Pribylovski, an analyst with the independent Panorama research center, told AFP.

Energy Independence

Europe’s press warned on Tuesday that Russia's "new cold war", which uses its massive supplies of natural gas as the main weapon, could force Europe to seek more energy autonomy and cut its dependence on Moscow.

"Russia's use of energy as a political weapon could prove disastrous," Britain's the Times warned.

"Ukraine may get through this winter, but the opening of a new cold war shows that pipelines are the new weapons of choice for an embattled and angry Kremlin."

However the paper added that Moscow's tactics could backfire.

"The lesson for Europe is clear... Europe's energy lifelines must never depend on Russia."

The Daily Telegraph said "the West must resist Russia's bullying."

The right-wing British daily saw Russia's decision to cut off Ukraine's gas supply as "an economic revenge on a former Soviet republic that has dared to declare its diplomatic independence, from Russia and to look towards western Europe."

The Financial Times urged the EU, the US and Japan to tell Putin "that if he wants to keep his place among the world's leaders he must start behaving like one."

The centre-left Independent spoke of "the frightening dependence of the European continent on Russian gas."

It warned that Moscow may no longer be a military giant, "but it has become an energy superpower".

In France, the communist daily L'Humanit said that "the brutality of this power play is really disturbing. It looks like the first act in an open energy war."

The leftist daily Liberation, under the front-page headline "Putin puts on the pressure", said that Europe was worried at its energy dependence on Russia.

"It is time to remind our 'Russian friend' that in an ever more interdependent world that it is in everyone's interest, theirs particularly, to display responsible behavior."

In Germany, the centre-left Suddeutsche Zeitung warned that "Today Ukraine is the victim, but no one can say that it will not also affect western Europe".

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