RPT-UPDATE 1-No gas supply impact from EU-Kiev tension-EU's Oettinger

Wed Oct 19, 2011 5:33pm BST

(Repeats to fix formatting)

* EU much better placed than in 2009 in event of supply outage

* New infrastructure spending should add to supply security

* Russia, Kiev ties still tense over gas

By Christopher Le Coq and Barbara Lewis

BRUSSELS, Oct 19 (Reuters) - Tension between Ukraine and the European Union over the jailing of former prime minister Yulia Tymoshenko will have no impact on the security of supply of natural gas to Europe via Ukraine's pipelines, EU Energy Commissioner Guenther Oettinger said.

He also reiterated previous comments that the bloc was much better prepared for any possible disruption of natural gas from Russia, the European Union's dominant supplier.

The European Union has bad memories of the impact of a pricing row between Ukraine and Russia at the start of 2009, which resulted in major disruption of natural gas supplies to member countries.

"No, in no way," Oettinger told reporters on Wednesday when asked if the situation in Ukraine could have any energy impact.

"We think that the Tymoshenko case must be looked at from the point of view of the rule of law. It is not connected with gas supply and security of supply."

Tensions between Ukraine and Russia are still high as Kiev says a deal brokered in 2009 between Russian Prime Minister Vladimir Putin and Tymoshenko left it paying an exorbitant price for Russian gas.

Ukraine wants a new deal, and talks are ongoing.

Russia, meanwhile, has moved to lessen its dependency on shipping gas through Ukraine with the opening of Nord Stream, an undersea route to carry gas directly from Russia to Germany.

The first technical gas -- needed to build up pressure -- flowed in September into the Nord Stream and the pipeline is expected to begin shipments in November.

"Ukraine has only got three or so years of maintaining the situation whereby 80 percent of Russian gas comes via its territory," said Andrew Wilson of think-tank the European Council on Foreign Relations.

"In a little over three years it will be, not entirely, but substantially bypassed. It could make trouble in that time, but for once the boot is on the EU's foot."

TRIPARTITE TALKS

The European Union has sought to nurture ties with both Russia and Ukraine through tripartite talks.

But on Tuesday it called off a meeting later this week with Ukrainian President Viktor Yanukovich over the imprisonment of his rival.

Yanukovich had been scheduled to meet European Commission President Jose Manuel Barroso and the president of the EU council of member states, Herman Van Rompuy, on Thursday for talks aimed at advancing the European integration course of his ex-Soviet country.

Technical preparations for an association agreement were continuing, diplomats said.

If any tension were to boil up into disruption of gas supply, Oettinger said the bloc was already much better prepared to cope and that planned investment would improve the situation further.

"We all learnt our lesson from the turn of the year 2008-2009," Oettinger said.

In particular, he cited an increase in gas storage capacity and improved interconnections so available supplies can be distributed more easily.

Oettinger was speaking after the publication of the EU's latest energy infrastructure package.

The plan seeks to speed through projects of common interest, such as cross-border pipelines, to help bring in supplies from sources other than Russia as well as to build infrastructure that promotes greener supplies and makes connections to bring about a single European market.

The EU will adopt a first list of projects of common interest in July 2013, and they will be eligible for some of the 9.1 billion euros ($12.45 billion) of EU money set aside for energy infrastructure.

The funding is in the draft 2014-2020 EU budget, subject to lengthy debate, and could leverage further cash from private sources, national governments and new project bonds.

($1 = 0.731 Euros) (Additional reporting by Richard Balmforth in Kiev and Justyna Pawlak and David Brunnstrom in Brussels; editing by Rex Merrifield and Jane Baird)