04 October 2014 | 11:32

Ukraine reports Norway gas deal to counter Russian cut

Ukraine said on Friday it had struck a gas deliveries deal with Norway's energy giant Statoil aimed at helping it avert the consequences of a months-long cut in Russian supplies, AFP reports.

The announcement represented a continuing drive by Kiev's new pro-Western leaders to tie their economic future to Europe and sever a decades-old dependence on the Kremlin that many Ukrainians feel has shackled their political rights.

But it also threatens to infuriate Moscow and complicate Statoil's effort to become one of the first global majors to access the potentially enormous wealth of untapped Arctic energy fields.

It signed a broad Arctic agreement with Russia's oil powerhouse Rosneft -- now the target of EU and US sanctions that are meant to punish the Kremlin for its actions in Ukraine -- in 2012.

The Norwegian deliveries deal's sensitivity was underscored when both Ukraine's state energy holding Naftogaz and Statoil refused to disclose the volumes or price of gas in the contract.

"The agreement marks a significant breakthrough for Naftogaz," chief executive Andriy Kobolev said in a statement.

"We are committed to integrating Ukraine fully into the EU energy market and working with the European Commission and other key actors to do so."

Russia nearly doubled Ukraine's gas price a few weeks after the February ouster in Kiev of a Kremlin-backed president who had earlier rejected a historic EU trade and political association pact.

The Russian state gas giant Gazprom cut deliveries to its western neighbour in mid-June after Kiev refused to pay the higher rate and all European mediation efforts failed.

A new round of EU-mediated talks between Moscow and Kiev failed to resolve the dispute last week and another meeting is still under discussion.

Russia warns Europe

Gazprom last year supplied Ukraine with 25.8 billion cubic metres of gas -- about half its needs.

Ukraine has tried to make up some of this year's shortage by boosting purchases from its western neighbours.

But Russia warned last week that it may be forced to interrupt European supplies because of a handful of nations' decision to re-export gas to Ukraine in breach of their Gazprom contracts.

EU officials said the long-term Gazprom agreements allowed the gas to be shipped freely to any interested client.

But Hungary immediately halted its limited shipments to Ukraine -- a decision Gazprom rewarded by boosting the former Soviet satellite's gas supplies.

Slovakia refused to bow to the pressure and continued providing Ukraine with the largest quantity of gas provided by any of its western neighbours.

Bratislava reported a 50-percent cut in Russian supplies on Wednesday.

But Gazprom later said its volumes to Slovakia had remained stable and suggested that Bratislava was referring to the Russian firm's failure to meet its request for additional supplies.

Statoil extracts its own gas from the North Sea and would not be in violation of any Russian agreements -- even if it were acting against the Kremlin's stated interests.

Ukraine seeks EU help

EU attempts to mediate an end to the latest Russian-Ukrainian gas war broke up in Berlin last Friday with an agreement for the three sides to meet again at the end of this week.

But its energy commissioner on Thursday mysteriously cancelled preliminary talks with visiting Ukrainian Energy Minister Yuriy Prodan.

Russia's energy ministry later said it had been informed by the Europeans that new three-way discussions that Moscow and Kiev expected to take place on Friday would need to be postponed.

EU Energy Commissioner Gunther Oettinger never explained the apparent delay.

But Prodan had previously rebuffed his proposal for Ukraine to admit owing Gazprom $3.1 billion in old debts -- and to cover the sum by the end of the year -- in exchange for a six-month rebate on gas.

Prodan was quoted by Ukrainian media as saying in Brussels that Moscow and Kiev had agreed to "lay out their (new) positions" by Tuesday.

Ukraine Russia Norway news Europe Energy cut