EU-Ukraine gas deal 'unfeasible': Gazprom

(MOSCOW) - An EU-Ukraine plan to modernise gas pipelines in the ex-Soviet republic was crafted with no input from chief supplier Russia and is "unfeasible," Gazprom head Alexei Miller said Friday, Interfax reported.

Speaking at a meeting with Prime Minister Vladimir Putin, Miller said he had talks with counterparts from E.ON Ruhrgaz AG of Germany, ENI of Italy and Gaz de France and said they too took a dim view of the EU-Ukraine deal.

"We have a united view -- this document was put together without participation of the main players in Europe's gas market; Russia, as supplier, and European firms that are the main consumers of Russian gas," Miller said.

He was referring to a declaration signed in Brussels on March 23 by Ukraine and the European Commission paving the way for badly-needed foreign investment in Ukraine's ageing gas pipeline infrastructure.

The deal was immediately attacked by Putin, who called it "unprofessional," and by Russian President Dmitry Medvedev, who said it raised "a number of questions, to say the least" and put talks with Ukraine on hold as a result.

Russia sits on the world's largest gas reserves and is the largest foreign supplier to the European Union.

But the reliability of Russian supply to Europe via Ukraine was called into question in January after Moscow accused Kiev of stealing gas and ordered a shut-off, cutting supplies to European states in the midst of a bitter winter.

Separately, Russia's European Union envoy Vladimir Chizhov said Moscow was still waiting for clarification of the Brussels declaration.

"Of course, it raised questions, which we are waiting to have clarified," Chizhov told reporters.

Meanwhile, Gazprom cut its gas production on March 31 by 30.5 percent compared with the average daily output for April of last year, Interfax reported.

The report quoted Miller as saying the company may have to review its investment startegy for 2009 in view of diminishing demand.