Russian-Ukrainian gas dispute has Central Europe discuss diversification of gas supplies

A shiver went through Central Europe on Monday when the Russian energy giant Gazprom cut gas supplies to Ukraine because of a price dispute. That led to a major drop in natural gas arriving in almost every Central European country. Their supplies come from Russia via Ukraine pipe-lines. By the middle of the week gas supplies were back to normal but not before relations with Moscow had been sorely tested.

Photo: CTK

The Chairman of Hungary's Foreign Relations Committee Zjolt Nemeth made it clear that Gazprom's other customers were very upset:

"There is a very clear Russian blackmail which doesn't hit only Ukraine but hits the only European Union - Hungary and Slovakia 100% - but other countries like Austria, the Czech Republic, Germany, Italy, even France, very substantial as well. And I think the European Union should be very strong on this subject."

But the European Union gave only limited support to Ukraine - offering to help settle the dispute. By the time EU energy ministers held an emergency meeting in Brussels on Wednesday - Moscow and Kiev had reached agreement on a price increase. Here's how Austria's economics minister Martin Bartenstein welcomed the agreement.

Photo: CTK

"Today we have witnessed an agreement between the energy companies of both Russia and the Ukraine. This is good news for the European Union but also good news for Russia and the Ukraine. The European Union does put a high value on the energy partnership which it enjoys with Russia and the full cooperation with Ukraine as a gas transit country."

So, the EU not wanting to tread on the toes of Russia or Ukraine. Mr Bartenstein went on to urge Europe to develop alternative sources of energy - implying that it was becoming too dependent on Russian natural gas. So was this week's crisis a wake up call to the EU? Genie Johnson put the question to William Ramsay from the International Energy Agency.

Photo: CTK

"Well I suspect it was. Governments have watched Gazprom over the last couple of decades be a regular supplier into western European countries - perhaps recognising that there had been this sort of thing before in Georgia, Armenia or Belarus but this is the first time its had some impact on European consumers."

Have they been too dependent on one supplier?

"Well I think governments have got to be conscious of their level of dependence and whether they can sustain a problem, a tactical problem or a political or a contract dispute and whether the systems are in place for mitigating that and whether they have done the right sort of diversification of supply and diversification of power generation fuels."