Scenarios for Ukraine after EU-backed gas deal
By Robin Paxton and Pavel Polityuk - Analysis
KIEV (Reuters) - Russia and Ukraine rescued a deal that would get Russian gas flowing again via Ukraine to Europe on Tuesday after a contract dispute that had cut off supplies for nearly a week.
What does this mean for Ukraine, already hit by a sharp economic slowdown, weak currency and political in-fighting?
* The deal allows for Russia to start pumping gas to Europe across Ukraine from 7 a.m. British time on Tuesday, barring no further obstacles. Ukraine, whose supplies Moscow severed on New Year's Day, is not permitted to use this gas for its own consumption.
* A sticking point could be payment for "technical gas" required to keep transit supply for Europe pumping across Ukraine. Prime Minister Yulia Tymoshenko said the technical gas will be paid for only after a supply deal to Ukraine is agreed.
Russian gas export monopoly Gazprom cut off supplies to Europe after accusing Ukraine of "stealing" the 21 million cubic metres of gas per day that Kiev says is necessary to maintain pressure in its pipeline system.
If Ukraine again refuses to pay, the Kremlin could renew its accusations of theft -- and cut supplies again.
* Ukraine's Naftogaz and Gazprom must now agree on a 2009 supply contract to Ukraine. The two sides are still far apart in talks: Ukraine wants to pay $201 per 1,000 cubic metres, while Gazprom's latest offer was $450. Ukraine paid $179.50 per 1,000 cubic metres last year.
Moscow and Kiev agreed in a memorandum in October that Ukraine would pay market prices within three years and supply intermediaries would be scrapped. But Gazprom Deputy CEO Alexander Medvedev told Ekho-Moskvy radio station that the memorandum would no longer form the basis of a deal. Continued...



