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Video by Luke SHRAGO

Latest update : 2009-01-20

Russian gas export monopoly Gazprom said it would start resuming gas deliveries to Ukraine and Europe starting at 8am (GMT+1), after Russian PM Vladimir Putin reached a long-awaited deal with his Ukranian counterpart Yulia Tymoshenko.

"Gazprom's (very kitsch) anthem" (click here to read more from our Observers)


AFP - Ukraine's presidency and the country's leading opposition party criticised a gas deal reached with Russia Monday, saying it handed victory to Moscow and would damage the Ukrainian economy.
President Viktor Yushchenko's energy advisor, Bohdan Sokolovsky, said that by agreeing to pay higher rates for Russian gas this year without increasing the amount it charges Russia for gas transit to Europe, Ukraine would be "subsidising" Russian state energy firm Gazprom.
"We are giving Russia a more than 60 percent discount on transit to Europe.... We will be subsidising Gazprom," he told the Interfax news agency.
The deputy leader of Ukraine's leading opposition party, the Regions Party, told Interfax that the deal was a defeat for the Ukrainian government because it would lead to gas prices of more than 300 dollars per 1,000 cubic metres.
"A price of more than 300 dollars for gas for Ukrainian companies... is a defeat for the Ukrainian government's entire energy policy," said the deputy leader, Anna German.
Under the deal, Russia will sell gas to Ukraine this year at a price based on the "European formula," but with a 20 percent discount. The tariff Ukraine charges for transit of Russian gas to Europe will remain unchanged from 2008, at 1.7 dollars per 1,000 cubic metres for every 100 kilometres.
Sokolovsky said that in the first three months of 2009 the deal will see Ukraine paying 360 dollars per 1,000 cubic metres, about twice the rate it paid last year.
"It will be a difficult time for the Ukrainian economy, which consumes significant quantities of gas," he said. "It will be very difficult for the Ukrainian metal and chemical industries to compete in world markets."
Ukrainian Prime Minister Yulia Tymoshenko said after the deal was signed that the average price Ukraine will pay for Russian gas in 2009 will be "close" to 230-250 dollars per 1,000 cubic metres.
The two countries signed Monday a 10-year agreement on providing Russian gas for the Ukrainian market and said all disagreements on transit to the European Union had been resolved.
Tymoshenko and Ukrainian President Viktor Yushchenko are bitter political rivals and were frequently at odds over how to handle the gas dispute.

Date created : 2009-01-20