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Alternative gas flow to Ukraine 'perfectly legal' says EU

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Alternative gas flow to Ukraine 'perfectly legal' says EU

Photo © michael langley - Fotolia

(BRUSSELS) - The EU is exploring alternative gas sources for Ukraine, the European Commission said on Tuesday, a day after Russia cut off a key energy flow that also feeds Europe.

With the Russian gas supply to Ukraine now halted, the EU is considering ways to replenish Kiev with imports from neighbouring Poland, Hungary and Slovakia.

Moscow is strongly opposed to so-called "reverse flows", but the European Commission on Tuesday said the process was legal.

"The option of the reverse flows ... is legally perfectly sound," said the EU's Energy Commission spokeswoman Sabine Berger.

"There are possibilities (for Ukraine) to buy gas from European companies," she said.

Ever since the Ukraine-Russia gas feud erupted earlier this year, Gazprom has cast doubt on the legality of European companies, who are locked into their own Gazprom contracts, pumping gas back into Ukraine.

European energy groups "do not have the right to do that," Miller said again on Monday.

A Ukrainian delegation set out for Budapest on Tuesday to confirm support for "reverse flows", with Kiev confident it can win a cheaper price than what Russia is willing to offer.

Weeks of acrimonious debt and price negotiations broke up on Monday with Russia walking away from a compromise solution proposed in Kiev by the European Union's energy commissioner.

Ukraine receives half its gas from Russia and transports 15 percent of the fuel consumed in Europe -- a dependence that has not diminished despite similar supply disruptions in 2006 and 2009.

The reverse flow option did not exist at the time and was developed as a way to reduce the impact of any new cut-off from Russia.

The EU also said Tuesday that 500 million euros ($680 million), part of a 1.6 billion euro aid package, had been disbursed to Kiev, the proceeds of which could pay for the reverse flows.

Avoid 'worst hardships'

Ukraine imports about 30 billion cubic metres in gas from Russia for its own use. If supply from Slovakia becomes available as planned this autumn, reverse flows will cover about a third of that.

"In the longer term about a third is not nothing but maybe not enough," said analyst Arno Behrens, Head of Energy Research at Centre for European Policy Studies.

"It is enough to overcome the worst hardships," he said.

Amid the gas dispute, the European Commission also said Russia's President Vladimir Putin had accepted a proposal for talks on the impact on Russia of a planned EU-Ukraine association accord.

Putin bitterly opposes the association accord which Ukraine's pro-Russian former president Viktor Yanukovych ditched in November, setting off the current crisis, and called for talks with both Brussels and Kiev to discuss its impact on Russia.

"We are working at many levels to alleviate concerns," said European Commission spokeswoman Pia Ahrenkilde-Hansen, adding that officials from Moscow and Brussels had just held technical talks on the impact of the agreement on the Russian economy.


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