Monday, January 12, 2009

Germany's E.ON Ruhrgas urges end to gas flow crisis

German gas market leader E.ON-Ruhrgas, (EONGn.DE) a partner to Russia's Gazprom in many industry projects, on Monday urged Russia and Ukraine to settle their transit dispute and resume shipments to Europe.

Patience in the European Union is thinning as the bloc, which gets a fifth of its gas supplies from pipelines through the affected route, is a victim of a recurrent Moscow-Kiev spat.

"We are calling on Russia and Ukraine to facilitate a deal enabling the work of the monitoring experts and to create the conditions for the gas to start flowing again," said a spokesman at its Essen headquarters.

It was incomprehensible that gas flows remained blocked due to "bureaucratic discussions about detail", he said.

As the row dragged on after a weekend deal failed to materialise, Ukraine on Monday removed conditions threatening the deal in order to open the way for the rival former Soviet states to resolve the row.

Hundreds of thousands of south-eastern European consumers are without gas in mid-winter.

Strong words from E.ON Ruhrgas on Russian obligations are rare as Ruhrgas is one of Gazprom's usually loyal western partners. It gets just under 30 percent of its gas from Russia.

E.ON Ruhrgas will be central in resolving the technical aspects of the dispute once it is commercially and politically settled.

It heads a 20-strong team of monitors, including GdF Suez GdF.PA and Eni (ENI.MI) representatives, which the EU sent to the border region on Friday to ensure correct transactions once flows resume.

German customers remained supplied in full as E.ON and its peers turned to gas reserves, alternative North Sea supplier countries, and a route via Belarus and Poland to bypass Ukraine.

A spokesman for E.ON peer Wingas (BASF.DE), which receives the bulk of its gas via the alternative route, said the status was still comfortable and had not changed over the weekend.

E.ON is more exposed to the Ukraine route as it receives its gas mainly via Waidhaus on the Czech border, where gas flows stopped last

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