Russia to Shift Ukraine Gas Transit to Turkey as EU Cries Foul

Russia plans to shift all its natural gas flows crossing Ukraine to a route via Turkey, a surprise move that the European Unions energy chief said would hurt its reputation as a supplier.

The decision makes no economic sense, Maros Sefcovic, the European Commissions vice president for energy union, told reporters today after talks with Russian government officials and the head of gas exporter, OAO Gazprom (GAZP), in Moscow.

Gazprom, the worlds biggest natural gas supplier, plans to send 63 billion cubic meters through a proposed link under the Black Sea to Turkey, fully replacing shipments via Ukraine, Chief Executive Officer Alexey Miller said during the discussions. About 40 percent of Russias gas exports to Europe and Turkey travel through Ukraines Soviet-era network.

Russia, which supplies about 30 percent of Europes gas, dropped a planned link through Bulgaria bypassing Ukraine amid EU opposition last year. Russias relations with the EU have reached a post-Cold War low over President Vladimir Putins support for separatists in Ukraine.

Sefcovic said he was very surprised by Millers comment, adding that relying on a Turkish route, without Ukraine, wont fit with the EUs gas system.

Gazprom plans to deliver the fuel to Turkeys border with Greece and its up to the EU to decide what to do with it further, according to Sefcovic.

We dont work like this, he said. The trading system and trading habits -- how we do it today -- are different.

Sefcovic said he arrived in the Russian capital to discuss supplies to south-eastern EU countries after Putin scrapped the proposed $45 billion South Stream pipeline. The region, even if Turkey is included, doesnt need the volumes Gazprom is planning for a new link, he said.

Ukraine makes sense as a transit country given its location in Europe and the very clear specified places of deliveries in Gazproms current long-term contracts with EU customers, Sefcovic said.

I believe we can find a better solution, Sefcovic said.

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Russia to Shift Ukraine Gas Transit to Turkey as EU Cries Foul

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