EU seeks to clear gas monitoring deal with Russia

MOSCOW/KIEV Sat Jan 10, 2009 12:06pm GMT

1 of 17. A worker turns a valve at the Nesvizhskaya compressor station some 130 km (81 miles) from Minsk January 9, 2009. Ukraine has given verbal agreement for the deployment of international gas transit observers, the chief of the Russian state-controlled gas export monopoly Gazprom, Alexei Miller, said on Friday. Gazprom has increased exports through the Yamal pipeline that goes from Siberia via Belarus to Poland and Germany to compensate for lower flows through Ukraine.

Credit: Reuters/Sergej Vasiljev

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MOSCOW/KIEV (Reuters) - The European Union began talks with Russia on Saturday to finalise a gas monitoring deal which would allow the resumption of gas supplies to Europe via Ukraine, which have been cut off for days over a pricing row.

Czech Prime Minister Mirek Topolanek, representing the EU presidency, told Russian Prime Minister Vladimir Putin that he would stay in the region for as long as needed to ensure that gas is pumped again to Europe.

He was seeking agreement from Moscow on a mission of EU, Ukrainian and Russian observers who would monitor the supplies flowing through Ukraine and assuage Russian fears that Ukraine is siphoning off gas for its own use, a charge Kiev denies.

"I will stay in the region until we manage to resume gas supplies," Topolanek told Putin at the start of their meeting.

The dispute between Moscow and Kiev has led to the worst ever disruption of Russian gas supplies to Europe, closing down factories in eastern Europe and increasing fears in the EU over future reliance on Russian gas deliveries.

The row, which began when Russia and Ukraine could not agree on this year's gas prices, has increased tensions between the two former Soviet states.

Russia accused Ukraine of corruption and stealing gas meant for Europe and Kiev said Russia's actions amounted to blackmail to extract an unjustifiably high price for its gas to Ukraine.

Both deny the accusations.

The presence of monitoring missions along the transit routes for Russian gas will reassure Moscow that the gas it pumps across Ukraine is not being siphoned off.

SPECIALISTS

Topolanek is trying to settle the exact details of the monitoring agreement, with Ukraine wary of Russia's proposal that specialists from European energy companies could be included in the mission.

Prime Minister Yulia Tymoshenko said on Friday Ukraine would agree to this.

But Deputy Foreign Minister Kostyantyn Yeliseyev said Ukraine risks losing control over its gas transit system through the inclusions of monitors from European companies in which Gazprom is a shareholder.

"I think this is another attempt by the Russians to deprive Ukraine of its entire gas transit system," he told reporters on Saturday. Instead, he said Ukraine supported an original proposal that had already been signed by the EU and Ukraine.

Wrangling over the details does not bode well for a quick resolution.

"Despite the fact that you are taking personal efforts to sort out the crisis, it is nevertheless deepening," Putin told Topolanek. "I hope you have managed to persuade partners in Kiev to sign the necessary documents."

Even if the gas resumes, it is likely to be delivered only to Europe, not Ukraine, as Moscow and Kiev have yet to agree a supply contract for this year. Russia has repeatedly said Ukraine must pay the going market rate for gas.

The EU gets a quarter of its gas supplies from Russia, 80 percent of which passes through Ukraine. So far, supplies to 18 countries have been disrupted by the dispute.

Eastern and central Europe have borne the brunt of the dispute, with many countries forced to seek gas from elsewhere or draw on their storage reserves.

Kiev and its former Soviet master have clashed over Ukraine's efforts to join NATO, a move Moscow opposes and viewed with wariness by European members of the alliance.

Ukraine has been beset for months by political squabbling between Yushchenko and Tymoshenko, his former ally, notably over ties with Russia.

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