EU - gas - Russia - Ukraine

Ukraine, Russia agree to restore gas supplies to EU

Thursday 08 January 2009

Ukraine and Russia promised to restore gas supplies to the EU as soon as observers are in place in Ukraine to monitor the pipelines, following talks between Russia's Gazprom and the Ukrainian state gas company in Brussels.

  
AFP - Russia pledged on Thursday to restore gas supplies to the EU once observers were in place to monitor pipelines in Ukraine as the crisis deepened in eastern Europe forcing heating cutbacks.

After a brief meeting in the European Parliament, the heads of Russia's and Ukraine's gas firms committed to having monitors stationed in Ukraine to check supplies to Europe, which have been cut in the dead of winter.

"Our agreement with the European Union is once the monitors are deployed and they have access, we will immediately resume gas supplies," the head of Russia's Gazprom, Alexei Miller, told journalists.

"Our duty is to re-establish Russian gas deliveries as quickly as possible via Ukraine," Miller said. "We should do that today."

An official with Kiev's delegation to the EU said the head of Ukraine's Naftogaz, Oleg Dubina, and Deputy Prime Minister Hryhoriy Nemyria had signed an agreement with the European Commission which "opens the way to immediate transit via Ukraine."

The proposed monitors, due on the ground as soon as Friday, will be tasked with checking how much gas is being piped from Russia to Ukraine, which is the main transit route for Russian gas to Europe.

Russia, which cut supplies for Ukraine's domestic market on January 1 due to a payments dispute, has accused Ukraine of stealing gas intended for Europe.

Russian Prime Minister Vladimir Putin said that the European Union should send the observers "as soon as possible."

With about a dozen EU countries suffering gas cuts, the bloc's leaders are growing increasingly impatient to see Moscow and Kiev resume the flow of gas critical for heating homes, schools and factories in bitter winter weather.

In Bulgaria, the government has begun rationing gas supplies to industries and temperatures in buildings plummeted. Seventy-five schools across the country closed until Friday for lack of adequate heating.

Serbia has switched 90 percent of its heating plants to crude oil after Russian gas deliveries were completely halted at midnight on Tuesday.

However nine towns and cities, mostly in Vojvodina, are unable to make the changeover from gas, leaving the locations with an estimated 900,000 inhabitants without regular heating in freezing conditions.

"The Russians must respect their contractual obligations to the Europeans," French President Nicolas Sarkozy told a joint news conference with German Chancellor Angela Merkel in Paris.

Sarkozy called on Russia and Ukraine to "faithfully take the path of negotiation to reach agreement", adding that France and Germany saw eye-to-eye on the issue.

Russia is the world's biggest natural gas producer and provides about one-quarter of the gas used in the European Union, or about 40 percent of the gas the bloc imports. About 80 percent of those imports pass though Ukraine.

But with Kiev refusing to pay western European prices for its gas, Russia first cut off all supplies for Ukraine's domestic market and then on Wednesday halted all supplies to the country, even those intended for Europe.

The organisation of the Brussels talks brought some badly-needed focus to a chaotic dispute that began as a commercial disagreement between Gazprom and Naftogaz and has mushroomed into a full-blown international crisis.

While Russia and Ukraine have exchanged accusations about who is to blame for the cuts, European countries heavily reliant on Russian gas have been plunged into crisis in the absence of imports in the peak winter demand period.

Slovakia and Romania have declared states of energy emergency, Bulgaria has ordered gas rationing for industry and Hungary and Croatia and Bosnia reported two days running of complete stoppage of Russian gas supply.

Gazprom ordered delivery of gas to Ukraine itself halted on New Year's Day after it failed to reach agreement with Naftogaz on payment of arrears for Russian gas already used by Ukraine and on prices for supply in 2009.

The move triggered a chain reaction: Russia accused Ukraine of "stealing" gas it was trying to ship further downstream to Europe and Ukraine countered that Russia had deliberately reduced supplies to provoke a crisis.

On the eve of the Brussels meeting, Russian President Dmitry Medvedev laid down a number of conditions for any resumption of Russian gas shipments via Ukraine.

They included a demand that Ukraine begin paying market prices for Russian gas immediately -- Russia has long sold gas to Ukraine at a discount -- and an independent EU monitoring plan.