By Douglas Busvine

ST PETERSBURG, Russia, June 10 (Reuters) Russia launched a robust defence of its reliability as an energy supplier on Saturday, saying sky-high oil prices had resulted from soaring demand rather than supply disruptions.

Finance Minister Alexei Kudrin backed Gazprom's drive into foreign energy markets, and said the gas monopoly was not to blame for a gas price dispute with Ukraine which hit exports to Europe for the first time in 40 years.

''We have quite stable growth of (energy) supply, but we are encountering a demand shock,'' Kudrin told a news conference after hosting finance ministers from the Group of Eight nations for talks in St Petersburg.

The meeting was meant to lay the ground for next month's summit of G8 leaders, the first to be hosted by Russia. Host President Vladimir Putin has put the theme of energy security at the top of the agenda.

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

Europe scrambled to seek alternative supplies, while U.S. Vice President Dick Cheney has accused Russia of using energy as a tool of ''intimidation and blackmail'' against its neighbours.

CHARTER CALL 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.

But Kudrin said that not Russia but Ukraine, which has ratified the charter, had violated its rules by withdrawing gas from transit pipelines during a period of intense winter cold.

''This removal of gas was a violation of the charter. Russia has not ratified the charter and did not violate it. Ukraine has ratified it -- and violated it,'' he said.

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 communique, G8 finance ministers ''recognised the importance of the principles'' of the energy charter -- in a softening of Russia's position hailed by French Finance Minister Thierry Breton.

''It is extremely important to recognise the principles behind the charter,'' he said. ''We believe it is major progress.'' MOVING DOWNSTREAM Gazprom has rattled consumers by making a play to extend its control of the gas supply chain from its Siberian fields to kitchen stoves in countries like Germany, Britain and Italy.

The gas giant is eyeing the possible takeover of Britain's largest gas distributor, Centrica, while Kudrin saw ''no obstacles'' to increasing Gazprom's access to Italian consumers.

In return, Italy's ENI hopes to outbid Germany's E.ON to win a one-quarter stake in the Yuzhno Russkoye gas field.

''There are no major barriers. Russian companies will invest in Italy and Italian companies will invest in Russia,'' said Kudrin.

He said energy exporters needed greater ''security of demand'' to justify major energy investments -- a view also expressed by the International Energy Agency.

''There is generic under-investment. We have not got enough upstream capacity. We have not got enough refining capacity; we need more investment in pipelines,'' said IEA deputy head William Ramsay, who attended the St Petersburg talks.

''Investment conditions are not right; people are not prepared to make investment decisions, and those investment conditions have to be improved,'' Ramsay told Reuters.

REUTERS MP KN1950