MOSCOW, September 4 (RIA Novosti) – The European Union is preparing short-term measures to secure gas supplies this winter if its largest supplier, Russia, cuts exports due to the crisis in Ukraine, according to a draft document quoted by Reuters Thursday.
The draft document, which confirms information from a European Commission source, says the European Union could take emergency measures to ensure that more coordinated use is made of facilities for converting liquefied natural gas (LNG) back into natural gas and of gas storage capacity, which can be done "when the normal functioning of the market does not lead to the optimal use of those facilities”.
The measures could also include making use of existing powers to ban companies from selling LNG tanker cargoes outside Europe, keep more gas in reserve, and order industry to stop using gas, according to the document.
The proposed EU measures aim to ensure that more gas stays in Europe, however, the European infrastructure is not well enough developed to bring large quantities of non-Russian gas into the region.
Russia's gas giant Gazprom meets around a third of Europe's gas demand, sending almost half of these supplies via Ukraine. However the gas pipelines running through Ukraine became the subject of political maneuvering after the escalation of the Ukrainian crisis.
Three-party consultations between Russia, Ukraine and the European Union on gas issues have been going on since April, but have not yielded any significant results.
Ukraine has refused to pay Russia $500 per 1,000 cubic meters and has offered Moscow to set the gas prices at $300 per 1,000 cubic meters during the low season and $380 during the winter season instead, or tie the gas prices to the spot market in Europe.
On June 16, after several unsuccessful rounds of talks, Russian gas company Gazprom was forced to implement a prepayment scheme for gas supplies to Ukraine over its accumulated debt.
As of today, Kiev’s gas debt to Russia is estimated to stand at over $5.3 billion.
Within six months, Ukraine plans to sign new agreements with the European Union on the transit of Russian gas and move the EU gas receiving point to the eastern border of Ukraine.
