G-7 Energy Ministers Focus On Energy Security Amid Ukraine Crisis

  • Date: 07/05/14
  • Selina Williams, The Wall Street Journal

Energy ministers from the Group of Seven industrialized nations said Tuesday they are ramping up efforts to strengthen energy security as tensions ratchet higher between Russia and the West over Ukraine.

Concerns have grown in recent weeks that Russia could cut off gas supplies to Ukraine because of unpaid bills. Ukraine’s arrears to Russia’s state-controlled OAO Gazprom are now estimated at around $3.5 billion.

Any halt to supplies to Ukraine could harm Gazprom’s European customers, since around 15% of Europe’s gas supply transits Ukraine.

“Energy should not be used as a means of political coercion nor as a threat to security,” the G-7 ministers said in a statement following a meeting in Rome. “We are extremely concerned by the energy security implications of developments in Ukraine, as a consequence of Russia’s violation of Ukraine’s sovereignty and territorial integrity.”

The ministers highlighted possible measures to improve energy security, including diversification of fuels and transport routes, and the encouragement of indigenous energy supply, along with promoting a more integrated market for liquefied natural gas and a more flexible gas market.

The energy ministers of Canada, France, Germany, Italy, Japan, the U.K. and the U.S., as well as the European Union, said they would work with the European Commission to develop emergency plans for next winter. They have also asked the International Energy Agency to present within six months an action plan for boosting the security of natural gas supplies.

The statement came after the European Commission confirmed that two further rounds of talks between the EU, Ukraine and Russia will take place this month in an attempt to resolve Ukraine’s gas debts.

Full story