World's Energy

BRUSSELS, May 29, 2009 (Reuters by Mark John) - The European Union is unlikely to meet a Russian request to help Ukraine with payments for billions of dollars worth of Russian gas, European Commission President Jose Manuel Barroso said on Friday. Barely four months after a pricing dispute between the two ex-Soviet states in January that disrupted supplies to Europe, Russia last week rejected a Ukrainian proposal to defer payment on up to $5 billion in gas storage fees. Moscow, backed by Italy, has urged the EU to help Ukraine. Russia has urged the EU to help Ukraine pay the bills and Barroso said he discussed the matter with Prime Minister Vladimir Putin by telephone on Friday. "Prime Minister Putin called me to tell me about the difficulties he anticipates in payments coming from Ukraine (and) to say that Ukraine has asked for some support for financing of these payments," Barroso told reporters. "It is difficult with our budget, if not impossible, to have some support from the Community budget for Ukraine," he noted, adding that he had promised Putin he would raise the matter with EU leaders who are due to hold a June 18-19 summit in Brussels. But he stressed it was mainly a problem between Ukraine and Russia. Europe receives about a fifth of its gas from Russia via Ukraine, with some eastern and southern European countries almost completely dependent on that gas. Russian gas export monopoly Gazprom (GAZP.MM) this week said it was concerned Ukraine would not pay for this month's gas supplies in full. It said it would have to move to 100 percent advance payments if there were any disruptions. Gazprom wants to store extra gas in Ukraine during winter to be able to respond more quickly to the needs of its customers in Europe. Italian Prime Minister Silvio Berlusconi, whose country is one of Europe's biggest consumers of Russian gas, has pledged to present to the EU summit a Russian proposal that Europe bear some of the costs that Ukraine is unable to meet. The temporary cut of Russian gas supplies via Ukraine to Europe in January undermined European confidence in Russia as an energy supplier and has given extra urgency to the bloc's attempts to seek alternative fuel sources. At a summit in Prague this month, EU leaders offered to provide more trade and stronger transport links to gas transit countries such aas Turkey and Azerbaijan in return for them supplying gas through an alternative "southern corridor" route.