The European Union and Russia have agreed to adopt an early warning system to prevent a repeat of past disruptions of gas supplies to Europe.

The system is intended to shield Europe from potential cuts in supply, and to protect consumers in the event of any severe disruption.

"An energy crisis like the one the EU suffered in January (2009) is harmful for supply, transit and consuming countries alike," EU Energy Commissioner Andris Piebalgs said after signing the agreement with Russian Energy Minister Sergei Shmatko.

This was a reference to the Russia-Ukraine dispute, where supplies to Europe were severely disrupted for almost three weeks when Ukraine failed to pay for its supplies. Bulgaria was particularly badly affected, as it is almost entirely dependent on Russian gas sources.

The agreement comes as fears are growing that the dispute could be repeated this January, when Ukraine holds presidential elections. Ukrainian Prime Minister Yulia Tymoshenko said the country had struggled to pay its latest monthly gas bill to Russia.

In a longer-term related development, Moscow last week ordered oil companies to use "up to 95%" of the gases associated with petroleum extraction.

President Dmitry Medvedev highlighted the flaring of gas extracted alongside oil as an outstanding example of ineffective use of energy resources.

Apart from the negative environmental impact, he said, the inefficient practice “sends tens of billions of roubles up in smoke”.

The amount currently 'flared' in western Siberia alone – some 20 B cubic meters - is the equivalent of one-third of the projected annual capacity of the South Stream pipeline project.

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