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Escalation over Ukraine 'treading on eggshells' — German power chief

May 26, 2014, 16:12 UTC+3

RWE and other European utilities receive about 30% of their gas supply from Russia, about half of which comes through Ukraine’s pipeline network

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RWE AG chief executive Peter Terium

RWE AG chief executive Peter Terium


LONDON, May 26. /ITAR-TASS/. The head of Germany’s largest power generator said Europe should avoid escalation in relations with Russia against the backdrop of the Ukrainian political crisis.

“If you live in Europe, particularly in Germany, and have numerous contacts with Russia, we’re treading on eggshells,” RWE AG chief executive Peter Terium told Bloomberg. “You need to maneuvre very carefully in order not to escalate.”

RWE and other European utilities receive about 30% of their gas supply from Russia. About half of that comes through Ukraine’s pipeline network.

“We will not see a very quick, simple solution, but better a long, difficult solution than an escalation,” Terium said in London.

Payment for the sale of RWE’s oil and gas production unit Dea, agreed in March, to a group led by Russian billionaire Mikhail Fridman for €5.1 billion ($7 billion) “is not at risk” as a result of the Ukrainian crisis, Terium said, adding that he expected the deal to close later this year.

RWE began deliveries of natural gas to Ukraine on April 15. A framework agreement signed by Ukraine's Naftogaz and RWE subsidiary RWE Supply & Trading in 2012 allows for delivery of up to 10 billion cubic meters of gas per year.

The German utility said it was planning to hold negotiations with Russia’s gas export monopoly Gazprom to review terms and conditions for natural gas supplies in order “to prevent negative impact on financial results after the expiry of current agreements”.

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