Russia, Ukraine Agree to Restart Gas Flow, E.U. Says

By Philip P. Pan
Washington Post Foreign Service
Sunday, January 11, 2009

MOSCOW, Jan. 11 -- The European Union said it brokered an agreement between Russia and Ukraine early Sunday to resume shipments of natural gas to the continent under the watch of international observers. But analysts warned that the key disputes that caused the shutdown were left unresolved and could lead to further disruptions.

Czech Prime Minister Mirek Topolanek, who holds the E.U. presidency, announced the deal after meeting with Russia's Prime Minister Vladimir Putin in Moscow on Saturday and flying to Kiev, the Ukrainian capital, where talks with Ukraine's Prime Minister Yulia Tymoshenko stretched past midnight.

"Nothing prevents Russia now from resuming gas supplies," Topolanek told reporters, according to the Associated Press.

Tymoshenko said the agreement would allow independent observers to confirm that Ukraine is an "honest transit country," the AP reported.

There was no immediate confirmation of a deal from the Kremlin, which signed an accord on a monitoring arrangement with Topolanek on Saturday.

The announcement appeared to clear the way for Russia to resume shipments of gas to Europe four days after the flow of fuel came to a complete stop, leaving large parts of the continent struggling to maintain heat and electricity. Russia accused Ukraine of stealing gas and shutting down key pipelines, while Ukraine charged that Russia abruptly halted deliveries.

Gazprom, the Russian gas monopoly, said Saturday that planes were waiting to take monitoring teams to stations on the pipelines, which run from Russia through Ukraine to the rest of Europe, as soon as Ukrainian officials agreed to the deal. Russia supplies more than a quarter of the gas Europe uses, about 80 percent of it via Ukrainian pipelines.

Ukraine, which is locked in a politically charged fuel-price dispute with Russia, had rejected an earlier Russian monitoring proposal, saying it was so onerous it amounted to an attempt by Russia to take control of Ukraine's pipeline system. Russia suspended all gas supplies for Ukraine on Jan. 1 after talks on a sharp price increase proposed by Gazprom broke down.

It could still be days before fuel deliveries to Europe are back to normal, because it will take time to restore pressure to the system. "No one knows how much time," said Ilya Kochevrin, executive director of Gazprom's export arm. "Once you open the gas flow, it will be clear how much damage was done."

In addition, the E.U. monitoring plan does not resolve fundamental disputes between Ukraine and Russia.

Russia agreed to resume shipments to Europe but says it intends to continue its gas embargo of Ukraine until the former Soviet republic agrees to pay prices closer to what Gazprom charges the rest of Europe. A new round of talks on the issue ended in failure Saturday.

The two sides also remain deadlocked on the question of who should provide the fuel needed to power the pipeline system and keep gas flowing to Europe. Putin has insisted that Ukraine use its gas to run the pumping stations, and he warned Saturday that Russia would again reduce shipments to Europe if Ukraine diverted Russian gas for that or any purpose.

"Once the monitoring mechanism starts working, we will start gas supplies," Putin said. "But if we see them stealing it again and part of the gas is missing, we will again reduce supplies by that amount."

Ukrainian officials have demanded that Russia provide the gas needed for the pumping stations and said they will continue taking it from the fuel meant for Europe if necessary.

A senior Ukrainian diplomat, who requested anonymity so he could speak more freely, said it would be "completely unreasonable" for the world to expect Ukraine to use its limited gas reserves to make deliveries to Europe even as Russia refuses to sell it new supplies.

He added that any monitoring deal that allowed shipments to Europe to resume would be only a temporary arrangement. "We can't guarantee that it will continue," he said. "It can't be fully settled until we have deliveries to Ukraine too. . . . We will not let our people freeze because Europeans are a little bit cold."

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