EU wary as Russia and Ukraine reach gas deal

MOSCOW – The prime ministers of Ukraine and Russia said yesterday they had reached an outline deal to restore disrupted gas supplies, while the European Union said it was waiting to see gas actually flowing on to Europe.

The row between the two ex-Soviet neighbours enraged the EU by leaving large parts of Europe without gas in the middle of the winter, and eroded Russia’s and Ukraine’s credibility as gas supplier and transit route respectively.
The dispute, the worst in an annual tug-of-war over prices between Ukraine and Russia, has pushed European consumers and policy makers to think hard about building new gas routes to cut their heavy reliance on Russian supplies.
‘Gas transit, the Ukrainian side assured us, will be restored very soon,’ Russian state channel Vesti-24 showed Russian Prime Minister Vladimir Putin saying in a brief statement after the marathon talks, which lasted into the small hours of yesterday morning.
But Czech Industry Minister Martin Riman, speaking for the EU, said: ‘We remain realistic. Over the past few days we have seen several similarly hopeful moments. The only thing that counts for the EU is the resumption of gas supplies. For the time being it is not clear when this resumption takes place.’

ONE-YEAR DISCOUNT

Putin, standing next to his Ukrainian counterpart Yulia Tymoshenko, said Moscow had agreed to give Ukraine a 20 per cent discount from the price European consumers pay, gon condition Kiev keeps preferential tariffs for Russian gas transit to Europe across Ukraine in 2009 at last year’s level’.
‘We also agreed that, starting January 1 2010, we will fully move to gas prices and transit tariffs in line with European levels, without any reductions and discounts,’ Putin said.
Tymoshenko said contracts would be prepared by today.
‘Once all the documents on gas transit and gas purchases have been signed, gas transit to Europe will be fully restored.’
Neither premier spelled out the agreed gas price.
In Kiev, a spokeswoman for Tymoshenko said she would fly back to Moscow today for a signing if the respective gas companies, Gazprom of Russia and Naftogaz of Ukraine, managed to finalise all details of the deal by then.
Russia’s Interfax news agency quoted a Russian government source as saying: ‘It is expected that the documents will be ready for signing on Monday [today] and will be signed in the presence of the prime ministers of Russia and Ukraine.’
A Russian government source said the two sides had agreed not to use intermediaries. Previous deals have been complicated by the use of the Swiss-based intermediary Rosukrenergo, a 50/50 joint venture between Gazprom and two Ukrainian businessmen.
Putin and Tymoshenko were under intense pressure from the European Union to resolve the dispute, which has cut gas supplies to much of eastern Europe since January 7.
While Putin had full authority to seal an agreement, it remained unclear whether Tymoshenko’s domestic political rival, President Viktor Yushchenko, would respect the deal.
A source in Yushchenko’s office said: ‘It is our understanding that this is an agreement between the two prime ministers and that the two sides in Moscow are now drawing up an agreement.’ – Nampa-Reuters