GDF Suez: Cutting EU Gas bad Business for Russia

The chief executive of French utility GDF Suez does not expect Russia to cut gas supplies to Europe over its standoff with Ukraine, but said on Thursday that companies were setting up contingency plans for this winter and beyond.

Ukraine accused Russia earlier on Thursday of bringing troops into the southeast of the country in support of pro-Moscow separatist rebels.

"Tension remains (high). Companies are preparing themselves for different scenarios, both in the short term, that means for this winter, and for the medium to long term," said Gerard Mestrallet, without elaborating.

Russia accounts for about 17 percent of GDF Suez' long-term gas supplies and less than 15 percent of its global supply portfolio.

"I don't think it is credible for Russia to cut gas supplies to Europe. To Ukraine yes, if Ukraine doesn't pay. But halting sales to those who pay is not in Russia's interest," Mestrallet told reporters on the sidelines of a conference.

"It would be a sanction against itself (Russia) if it can't sell its gas to Europe it would deprive itself of its main source of external resources," the CEO said.

He said the situation was very different to during the previous crisis between Ukraine and Russia because gas did not have to transit through Ukraine to reach Western Europe, thanks to the Nord Stream pipeline between Russia and Germany.

He said that, last winter having been relatively warm in Europe, gas storage levels were high and there was no reason to worry in countries such as France and Belgium, although eastern European countries such as the Baltics could be affected.

Reporting by Michel Rose