EU agrees to talks with Russia on Ukraine gas supply: Barroso

(BRUSSELS) - The European Union said it had agreed Thursday to hold talks with Russia on its gas supplies to Europe through Ukraine, warning Moscow its reliability as an energy source was at stake.

The EU "agrees on your proposal for consultations with the Russian Federation and Ukraine with regard to security of gas supply and transit," European Commission head Jose Manuel Barroso said in reply to an April 10 letter from President Vladimir Putin.

In his letter, sent to 18 EU member states, Putin had warned that Moscow would no longer tolerate late payment for gas supplies to Kiev and threatened to cut off deliveries completely if nothing was done.

That set alarm bells ringing in the EU, which depends on Russia for about 30 percent of its gas supplies, with a large amount of that transiting via Ukraine.

Barroso told Putin Thursday, on behalf of all 28 EU members, that the bloc and Russia were Ukraine's main trading partners and as such, both had an interest in ensuring its "long-term political and economic stability."

"Therefore it is our common interest to quickly engage in talks which will include Ukraine."

Barroso said Putin's threat to cut supplies to Ukraine was a "cause of serious concern" as it threatened the gas flow into the EU and other partner countries.

Such supplies, he noted, were covered by contracts between European companies and Russian gas giant Gazprom.

Accordingly, it "continues to be Gazprom's responsibility to ensure the deliveries of the required volumes as agreed in the supply contracts," he said.

The EU expected "commercial operators on all sides to continue respecting their contractual obligations and commitments," he said.

On that basis, the "contractual reliability of the Russian Federation as a supplier of gas is at stake in this matter," Barroso said.

"Remaining a reliable supplier would appear to be clearly in the interest of the Russian Federation," he said, referring to "international gas market developments."

While the EU is heavily dependent on Russian gas supplies, Moscow too relies greatly on the EU market for its energy and raw material exports.

A sharp slowdown in the Russian economy has made those markets even more important.

Earlier Thursday, Putin said he would demand pre-payments from Ukraine for gas supplies in one month if Kiev does not pay its debts.