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Russia’s criticizes EU-Ukraine gas system deal

  Russia’s Foreign Ministry reacted on Thursday to a brewing dispute with the EU over a new natural gas agreement with Ukraine, saying the decision to exclude Russia from the talks was an “unfriendly act.”

After the signing on Monday of the agreement, under which the EU pledged financial support to modernize Ukraine’s gas supply system, Russian Prime Minister Vladimir Putin warned that ties with the EU could be reviewed.

Ministry spokesman Andrei Nesterenko told reporters: “What happened in Brussels was an unfriendly step with regards to Russia, both on the part of the EU and Ukraine.” He said that agreements reached between Russia, Ukraine and the EU in February on the format of future cooperation have been "clearly violated."

Russian President Dmitry Medvedev said Tuesday that intergovernmental talks with Ukraine had been suspended until the issue is resolved. Nesterenko said: “We are interested in conducting dialogue with the Ukrainian side on any issues, but we must build such a discussion on conditions of respect for each other’s positions and understanding of those positions.”

Ukrainian Prime Minister Yulia Tymoshenko attempted to calm the situation, telling reporters on Thursday that Russia will have a full role in the modernization of Ukraine’s gas grid.

“I am certain that in the near future, all misunderstandings between Russia and the European Union will be cleared up, and Russia will become a full-fledged participant in these processes,” the premier’s press service quoted her as saying during her visit to Japan.

The pledge of cooperation signed by Ukraine, the EU and several banks signed aims to encourage investment and avoid a repeat of the dispute at the start of the year, which resulted in a temporary cut-off in Russian gas supplies. Russia, which transits about 80% of its Europe-bound gas via Ukraine, says the EU deliberately excluded it from the talks.

Under the agreement, the EU endorsed Ukraine’s plan to modernize its Soviet-era pipelines and underground storage facilities, and to build new gas metering stations. The EU pledged €2.5 billion ($3.4 billion) on the condition Kiev reform the sector to make it more open and transparent.

Ukraine also asked the EU to help build two more pipelines to increase the network’s capacity by about 60 billion cubic meters (bcm) to 200 bcm, a project it earlier estimated at $5.5 billion.

Kiev says this would be cheaper than building long-distance gas pipelines, such as Nabucco promoted by Europe and the Nord Stream and South Stream projects Russia has been pushing for. (rian.ru)