Putin wants to turn Balkans into hub for energy transit

RUSSIA:President Vladimir Putin has told Balkan leaders that Russia wants to turn the region into a major transit and storage hub for its energy, potentially undermining European Union plans to wean itself off Moscow's oil and gas.

Mr Putin made clear at a conference in Croatia yesterday that Moscow wanted to retain its dominant role in providing heat and light to eastern Europe, despite grave reservations across the EU that Russia is using its abundant energy as a political weapon.

Russia's price and supply disputes with Ukraine and Belarus have disrupted gas delivery to several European countries in the last two winters, but Moscow has continued to strengthen its grip on eastern Europe's energy infrastructure while the EU has dithered over plans for rival pipelines and storage facilities in the region.

"Over 40 years, despite serious, really global changes in the world, Russia has not broken one of its contractual obligations - never," Mr Putin insisted, claiming that Moscow backed "transparency, the rule of law and the absence of any discrimination in the openness of markets."

The Kremlin leader said Russia wanted to invest in new pipelines and storage facilities bringing oil and gas from the Caspian Sea to the Balkans and on to the rest of Europe and supporting the creation of an "energy ring" that would link Black Sea countries - including Romania and Bulgaria - with the Russian electricity grid.

Such plans will meet a mixed response in many capitals around the region and send shivers through Poland and the Baltic states, EU states that have rocky relations with Russia and which fear Moscow could soon freeze them out of its energy supply chain.

Russian firms building a new Black Sea pipeline with an Italian company already want to extend it into the heart of Europe. They are also pushing ahead with another pipeline to carry oil across Bulgaria from the Black Sea to Greece's Mediterranean coast.

The EU's planned rival pipeline, Nabucco, is still bogged down in negotiations, leaving individual member states to make their own provisions.

Hungary and Croatia plan to build a terminal on the latter's Adriatic coast to import liquefied natural gas from outside Russia and Poland hopes to create a similar facility on the Baltic Sea.

Mr Putin played down tension with Brussels, insisting that Russia was "ready to build our relations in co-operation with the European Union".