Ukraine steals gas
© Reuters/Marko DjuricaRussian President Vladimir Putin looks on during a meeting with Serbian President Tomislav Nikolic (not pictured) at Serbia Palace building in Belgrade October 16, 2014.
Moscow will reduce gas supplies if Kiev starts siphoning deliveries destined for Europe, said Russia's President Vladimir Putin during a visit to Serbia.

"There are large transit risks. If we see that our Ukrainian partners start illegally taking our gas from the export pipeline as it was in 2008, we will equally reduce the amount of supply as happened in 2008," warned Putin on Thursday at a news conference in Belgrade, stressing he was "hopeful" it would not come to that.

However, the Russian president pledged that Moscow will supply enough gas to Europe this winter.

"I can tell you for sure, and I am saying with absolute responsibility, there will be no crisis in Europe due to the fault of Russian participants in energy cooperation," Putin stressed.

"Russia has always been a reliable supplier, we have enough resources."

Given the threat of gas disruption, the South Stream project starts looking increasingly attractive and "beneficial for European consumers," Putin said. The issues connected with the delay of the construction of South Stream are "of a political character" only, he added.

"In this case politics hurt the economy for sure, causing damage to a certain extent, even reducing the competitive advantages of the European economy in comparison with other regions of the world."

Putin requested support from his European partners, saying Russia couldn't "unilaterally construct a pipeline system worth billions of dollars if our partners are still thinking whether to develop the project or not."

The Russian leader said there was a big debate during the construction of the Nord Stream pipeline along the bottom of the Baltic Sea. However now, when the project is finished, "everyone is happy and saying 'thank you'," as the pipeline "turned out to be very helpful," he added.

The South Stream gas pipeline is a transport grid that will deliver gas to South and Central Europe via the Black Sea and the Balkans instead of through unreliable Ukraine. The project started in 2002, with first deliveries due in 2016, and it is expected to be fully operational in 2018.
south stream russia gas
© South Stream
The EU anti-monopoly legislation called the Third Energy Package has been a stumbling block in the South Stream negotiations. Amongst other stipulations, the Third Energy Package requires half the capacity of the pipeline built with Russian money be made available to independent suppliers, for example the transit of Caspian gas to Europe independently from Russia.

Russia insists the South Stream project should be exempt from this anti-monopoly legislation, with Gazprom being the sole owner of the infrastructure and gas supplier to Europe.


Comment: Putin is wise to stipulate this, however anti-capitalist it may appear. It is their product and they are bearing the majority of construction costs and risk of transport. It will also prevent these third party re-salers from gouging their markets.


On Thursday a series of meetings are to kick off in Milan, and the gas issue will be on the table, said Putin.

"Our partners - European, Ukrainian - are in contact with us. I hope they will be able to agree and put an end to all the debates," Putin said after meeting Serbian officials in Belgrade.

Serbian Prime Minister Aleksandar Vucic said that Serbia and Russia are partners with an "even better relationship in store."

He stressed that Serbia "won't ever impose sanctions against Russia," even though the country is following the European course.

"Nobody can order Serbia to ruin its relations with the Russian Federation," he added.