EU-Ukraine gas deal 'unfeasible'

An EU-Ukraine plan to modernise gas pipelines in the ex-Soviet republic was crafted with no input from chief supplier Russia and is "unfeasible", Gazprom head Alexei Miller yesterday, Interfax reported.

Speaking at a meeting with Prime Minister Vladimir Putin, Mr Miller said he had talks with counterparts from E.ON Ruhrgaz AG of Germany, ENI of Italy and Gaz de France and said they too took a dim view of the EU-Ukraine deal.

"We have a united view: this document was put together without participation of the main players in Europe's gas market - Russia, as supplier, and European firms that are the main consumers of Russian gas," Mr Miller said.

He was referring to a declaration signed in Brussels on March 23 by Ukraine and the European Commission paving the way for badly-needed foreign investment in Ukraine's ageing gas pipeline infrastructure. The deal was immediately attacked by Vladimir Putin, who called it "unprofessional," and by Russian President Dmitry Medvedev, who said it raised "a number of questions, to say the least" and put talks with Ukraine on hold as a result.

Russia sits on the world's largest gas reserves and is the largest foreign supplier to the European Union.

But the reliability of Russian supply to Europe via Ukraine was called into question in January after Moscow accused Kiev of stealing gas and ordered a shut-off, cutting supply to European states in the midst of a bitter winter.