Russ Oil-Gas

March 30, 2009 (Reuters by Ivana Sekularac) - SARAJEVO - The European Union, Russia and Ukraine should work together on securing the safe supply of gas to the 27-nation block, EU energy chief Andris Piebalgs said on Monday. Brussels signed a cooperation agreement with Ukraine on modernising the system last week but Russia, which exports most of its gas through Ukraine's pipelines, was angry at being excluded from the talks. "European companies together with Gazprom and Naftogaz should look for a viable model that guarantees safe supply of gas," Piebalgs said. "I think all three sides, EU, Ukraine and Russia are interested in stable supplies from Russia via Ukraine." "Russia has made it clear that they don't want to be excluded," Peibalgs told Reuters on the sidelines of the energy forum in Sarajevo. EU financial institutions including the European Investment Bank and the European Bank for Reconstruction and Development will do due diligence for financing modernisation of the gas pipeline through Ukraine, he said. The dispute over Ukraine's pipeline system has revived fears of a repeat of a January gas dispute between Moscow and Kiev, when major EU customers were left without gas for nearly two weeks in the dead of winter. Russia's Gazprom (GAZP.MM: Quote, Profile, Research) supplies Europe with more than a quarter of its gas, and around 80 percent of that goes via pipelines that cross Ukraine. Russia's Prime Minister Vladimir Putin has threatened to review ties with the EU if Moscow's interests are ignored. "We are now in the spring and we should think more about next season not to have next winter like this one," Piebalgs said.