Russia bids to allay Europe supply fears
Russia's energy minister today assured Europe that it would receive stable gas supplies from his nation despite problems with transit country Ukraine and falling output in Russia.
Russia, which supplies a quarter of Europe's gas, much of it via Ukraine, has twice cut supplies in recent years due to pricing disputes between Moscow and Kiev.
"There are all the necessary reasons to see stable supplies to Europe," Reuters quoted Sergei Shmatko telling a news conference. "The problems of January 2009 will not be repeated."
Shmatko's comments came after Russia on Friday rejected a Ukrainian proposal to defer payment on up to $5 billion in gas storage payments.
"Five billion dollars is too much... We are ready to support Ukraine but we just don't want to do it alone," he said, calling on the European Union to work closely with Moscow and Kiev to guarantee stable gas supplies.
Turning to the South Stream project to export up to 63 billion cubic metres of Russian gas to Europe via a new pipeline, Shmatko said Russia expected to sign agreements within a few weeks with Slovenia and Austria whose support is necessary to launch the project.
South Stream, led by Russia's gas giant Gazprom and Italy's energy giant Eni, is widely seen as a rival to the European Union-backed Nabucco project.
Gas output in Russia, the world's biggest producer, is expected to fall by up to 20% this year mostly in response to weak demand at home and in Europe, but the decline could be smaller as clients would need to fill up storage facilities later this year, Shmatko said.
"So far we are expecting a fall of between 18% to 20% compared to 2008," Shmatko said. "But I think this fall could be reduced thanks to an increase of pumping gas in the storages."
Gazprom expects to post an up to 18% drop in gas output this year to between 450 Bcm and 510 Bcm.