EU, Balkan neighbors sign energy cooperation accord

EU, Balkan neighbors sign energy cooperation accord

By ROBERT WIELAARD
Associated Press Writer

LUXEMBOURG (AP) -- The EU signed an accord Thursday with its Balkan neighbors that guarantees investment in the region's electricity and natural gas networks and fosters energy cooperation among nations there. It takes effect July 1.

The deal will create a supply route for natural gas from the Middle East and the Caspian region to the EU, broadening Western Europe's range of suppliers, and let international lenders such as the World Bank fund upgrades and expand southeast European electricity networks.

EU officials estimated Balkan nations need 23.5 billion euros (some $30 billion) in foreign investments to upgrade and expand existing electricity grids over the next decade.

The agreement is a blueprint for a deal the EU wants to sign with Russia that would guarantee Western Europe secure energy supplies and let foreign investors into Russia to provide funding to upgrade oil and gas production and transit facilities.

Russia, however, balks at letting the EU dictate fair trade and competition rules for its vast energy sector.

At a meeting, the EU energy ministers endorsed an EU head office report -- written for the EU leaders who meet next week -- urging they expand their search for secure energy supplies.

Western Europe's increasing reliance on oil and gas from volatile regions and suppliers threatens sustained economic growth, it said, adding that affordable, reliable and sustainable flows of energy are of acute importance, especially since China, India and Brazil need huge amounts of energy to stoke their fast-growing economies.

It calls on EU leaders to pursue energy cooperation accords with Russia, Norway, Turkey, Ukraine and countries in the Caucasus, the Caspian basin, North and Central Africa and Central Asia, and to impose sound trade and investment rules to secure future supplies and production.

Russia supplies a quarter of the EU's oil and gas needs. A cut in gas supplies amid a price dispute with Ukraine in January tarnished Russia's reputation as a reliable supplier.

The EU-Balkan agreement was signed in the margin of the energy ministers meeting between the 25-nation EU and Croatia, Bosnia and Herzegovina, Serbia, Montenegro, Macedonia, Albania, Romania, Bulgaria and the United Nations, on behalf of Kosovo. Turkey, Ukraine and Moldova are observers to the agreement and are expected to join it in the years ahead.

Under the deal, the EU will extend its fair trade rules in energy and environment to the Balkan peninsula and subject the energy sector there to EU regulatory controls.