Russian Prime Minister Vladimir Putin ordered the resumption of gas supplies via Ukraine to Europe on Tuesday, six days after a Russian- Ukrainian price row cut deliveries in freezing temperatures.
Alexei Miller, CEO of Russia’s gas export monopoly Gazprom told Putin he proposed restarting gas deliveries at 0700 GMT on Tuesday. Putin replied: “Good, I agree. Let’s get down to work.” Russia, whose bitter row with its neighbor over gas prices has left European countries scrabbling to find alternative energy supplies, agreed to resume supplies after signing a deal with Kiev on monitoring gas flows.
Russia has accused Ukraine of siphoning off gas to make up for a shortfall since Moscow turned off the tap on January 1 in a dispute over gas prices. Ukraine denies the charge and says Moscow is holding European energy consumers to ransom. Moscow and Kiev have still not settled their contract row -- played out against a backdrop of furious disagreements over Ukraine’s pro-Western policies -- leaving Ukraine itself cut off from Russian gas.
Even as Putin was giving the order to restart supplies, Gazprom accused Ukraine of creating a fresh crisis over gas transit by disputing who will pay for technical gas -- the fuel needed to restore pressure in the pipeline system. The monitoring deal, signed in Brussels on Monday, set out the procedures for international observers to deploy to strategic points along the gas export route to check no gas is being stolen -- a condition set by Russia for resuming supplies.
The gas could reach the first customers in the EU within 24 hours of the restart, European Energy Commissioner Andris Piebalgs told a briefing in Brussels. Russian and Ukrainian officials had predicted it would take 36 hours. An attempt to get the deal signed over the weekend collapsed after Russia objected to handwritten comments Ukraine had added to the document at the last minute. Under pressure from the European Union, Kiev later dropped its addition.
But Russian officials said there was still the possibility fresh disagreements, including Ukrainian refusal to pay for the technical gas, could undercut the latest deal. “By making such statements the Ukrainian side is once again creating a crisis situation with the transit of Russian gas to European consumers,” Gazprom spokesman Sergei Kupriyanov said in a statement.
The dispute has highlighted Europe’s dependence on Russian gas and galvanized efforts to find alternative supply routes. “The crisis must encourage member states to make energy security a bigger priority than it has been so far,” Czech Industry and Trade Minister Martin Riman, whose country holds the EU’s presidency, said in a telephone interview. “This crisis should be an encouragement, a kick for us all to start working faster and seriously on the projects,” he said.
The gas row marks yet another power-play between Moscow and Kiev, whose relations have been strained since Ukraine elected pro-Western leaders after the ‘Orange revolution’ in 2004 and applied to join the NATO military alliance. Riman expressed the EU’s exasperation over the events of recent weeks. “I’d be very careful to evaluate who is to blame more for the situation, whether Russia or Ukraine...It is shrouded in secrecy. We’ll probably never find out.”
Kiev has said it has enough gas stockpiled to cope without Russian supplies until the spring, and has said it will not be pressured into paying the $450 per 1,000 cubic meters of gas that Gazprom is demanding. The price is broadly in line with what European customers pay but is a huge jump on the $179.5 Ukraine paid last year.
Eastern Europe has been badly hit by the gas shutdown, with several countries forced to look to alternative means of power or to use their reserves. Bulgaria said it would ask the European Union to provide €400 million in aid to help ease its dependence on Russia, its sole gas supplier, by expanding storage and building pipeline links to Greece and Romania. Bulgaria, like Slovakia, said it might be forced to restart a nuclear reactor to produce enough electricity.
Analysts say the dispute has damaged both Moscow and Kiev: Ukraine’s ambitions to integrate with Western institutions have suffered a setback, while questions are again being asked about Russia’s reliability as an energy supplier. “It is unbearable that Russia and Ukraine carry out their conflict in the middle of a grim cold winter on Europe’s back,” German economics secretary, Peter Hintze, said in Brussels. (Reuters)