Russia defends its record on gas supply reliability

Russia mounted a strong defence of its reliability as an energy supplier during the G8 finance ministers meeting in St Petersburg over the weekend.

The country rejected criticism over its behaviour during a gas price dispute with Ukraine during the winter and it again asserted Russia's right to expand into foreign energy markets. "We have quite stable growth of [energy] supply, but we are encountering a demand shock," said Russia's finance minister, Alexei Kudrin. Mr Kudrin said energy exporters needed greater "security of demand" to justify major energy investments.

The meeting was meant to lay the ground for next month's summit of G8 leaders, the first to be hosted by Russia. President Vladimir Putin has put the theme of energy security at the top of the agenda for the main event. US vice-president Dick Cheney recently accused Russia of using energy as a tool of "intimidation and blackmail" against its neighbours.

Britain's Centrica remains on the shopping list of Russian state-owned gas giant Gazprom. Russia's finance minister, Alexei Kudrin, pointedly trumpeted the fact that he saw "no obstacles" to increasing Gazprom's access to Italian consumers. No such description was applied to Britain, where any bid for Centrica would be highly controversial.

Russia, which supplies a quarter of Europe's gas, came under fire for turning off the taps to Ukraine for two days in January, triggering calls by consuming nations to break the hold on exports enjoyed by state-controlled Gazprom.

Mr Kudrin asserted that it was Ukraine, not Russia, which violated the terms of the International Energy Charter during the dispute.

Europe has pressed Russia to implement the International Energy Charter, a document signed but not yet ratified by Moscow which calls for open access to energy resources and pipelines.

Mr Kudrin said more work needed to be done to make the charter acceptable to Russia, including new rules on transit, investment and nuclear energy.

In their communiqué, G8 finance ministers "recognised the importance of the principles" of the energy charter, in a softening of Russia's position.

The finance ministers predicted a year of strong economic growth despite high oil prices, skidding US stock prices, rising interest rates and fears of inflation. They said economic growth was healthy and becoming more broadly based despite oil at $70 a barrel and imbalances - one of which is the big US trade deficit, another China's trade surplus.