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Andris Piebalgs, the European Energy Commissioner, while welcoming the agreement which ends the prospect of Russian gas supplies to the EU being disrupted by the bilateral dispute, gave warning that several lessons had to be learnt.
“It is clear that Europe needs a more collective and cohesive policy on energy supply. Now, this is only done at national level. We need a more European dimension,” he said.
Mr Piebalgs will present a blueprint of the new policy to EU leaders in March and table draft legislation by the end of the year. An agreement to strengthen the EU’s defences against sudden disruptions in energy supplies was reached at Hampton Court in October.
Mr Piebalgs said that the policy would have to establish clear rules on the transit and supply of energy. It would also look to develop energy efficiency, diversify sources as much as possible and use the EU’s diplomatic muscle to establish firm contractual arrangements with key suppliers.
The terms of the five-year deal between Russia and Ukraine are typically murky. The Russian state monopoly Gazprom will sell gas to a 50 per cent Gazprom-owned Ukrainian subsidiary, called RosUkrEnergo, for $230 (£130) per 1,000 cubic metres, more than four times the price Ukraine paid for Russian gas last year.
However, RosUkrEnergo will sell gas to the Ukrainian state gas company Naftogaz for $95 per 1,000 cubic metres. The difference in the two prices will be made up by cheaper gas from central Asia, particularly Turkmenistan. Ukraine will therefore probably be buying more gas from central Asia, and much less from Russia.
Russia will also pay Ukraine a 40 per cent higher fee for the transit of Russian gas across its borders.
Jonathan Stern, the director of gas research at the Oxford Institute for Energy Studies, said: “We don’t know yet whether Ukraine can operate under the new terms.
“It’s an important question for western Europe, because Ukraine has shown it’s prepared to lift European gas from Russian pipes if it can’t meet its gas needs contractually.”
The failure of the two sides to agree a new price led to Russia turning off the gas pipes to Ukraine on Sunday. Ukraine made up for the shortfall in its own gas by taking gas destined for the rest of Europe, cutting supplies to some countries by 50 per cent and provoking EU ministers to convene in Brussels yesterday for crisis talks. Any shift in EU energy policy would be bad news for Russia. The EU gets 25 per cent of its gas from Russia and revenues from these sales account for almost 8 per cent of Russian GDP. Gazprom has worked hard to be seen as a reliable supplier to the EU.
William Ramsay, the deputy head of the International Energy Agency, said: “Russia hasn’t done itself any favours. European policy-makers will have taken notice that Gazprom uses its monopoly position for political purposes.”
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