No Way Out For Ukraine

By: fromPоrtugal

on: 12.01.2009

Ukraine has removed conditions that had threatened a gas deal to resume Russian supplies to Europe, Russia's gas export monopoly said on Monday.

Russian President Dmitry Medvedev appealed to EU leaders late on Sunday to exert influence on Kiev to withdraw the annotations.

Ukraine appended its own declaration to the deal Russia had signed a day earlier.

A copy of the monitoring agreement, seen by Reuters, has the handwritten words "with declaration attached" next to the signature of the Ukrainian government's representative

MOSCOW/KIEV (Reuters) - A deal to restore Russian gas supplies via Ukraine to Europe appeared on the verge of collapse after Moscow rejected additions by Kiev as a 'mockery of common sense'.

Russian President Dmitry Medvedev appealed to EU leaders late on Sunday to exert influence on Kiev to withdraw the annotations. Government sources said Prime Minister Vladimir Putin had proposed sending officials to Brussels on Monday for emergency talks.

Ukraine, its own supplies cut off in a dispute with Moscow over the price it pays for Russian gas, signed an agreement on Sunday allowing monitors to check gas flows across its territory to Europe and assuage Russian fears Kiev would siphon off gas for itself. But it appended its own declaration to the deal Russia had signed a day earlier.

The European Union was also party to the deal and EU monitors had already begun arriving when the new dispute flared.

"I cannot call such stipulations and additions other than a mockery of common sense and violation of earlier achieved agreements," Medvedev said of the Ukrainian terms.

"These actions, in fact, aim to disrupt the existing agreements on monitoring gas transit and are clearly provocative and destructive in essence ... I therefore order the government not to implement the document signed yesterday."

His statement sparked a new flurry of diplomatic activity. The European Commission said its chief, Jose Manuel Barroso, and Ukrainian Prime Minister Yulia Tymoshenko had agreed to address Russia's concerns.

BROADER TENSIONS

The commercial dispute over gas prices has played out against a background of broader tensions between Ukraine, seeking to join the NATO alliance, and its giant northern neighbor.

Russia cut off all gas via Ukraine to Europe last week. The EU, which gets a fifth of all its gas supplies via that route, has found itself playing arbiter in a bitter power-play between two ex-Soviet states still acting out a separation.

Putin has accused the pro-Western Ukrainian leadership of President Viktor Yushchenko, facing a deepening economic crisis, of being corrupt and inept. It wants Kiev to move to market prices for its gas, after years of subsidized pricing.

A copy of the monitoring agreement, seen by Reuters, has the handwritten words "with declaration attached" next to the signature of the Ukrainian government's representative.

The declaration, a copy of which has also been seen by Reuters, stated that Ukraine had not siphoned off any transit gas and that it had no outstanding debts to Russian export monopoly Gazprom - a central bone of contention between the two countries.

It said Russia must supply volumes of "technical" gas, at no cost, to Ukraine to maintain pressure in the pipeline system - a demand Gazprom described as "an attempt to legalize the theft of gas."

Gazprom said Ukraine was demanding 21 million cubic meters of technical gas per day - enough to meet the daily needs of a country like Austria.

"Ukraine has again taken a destructive position," a Gazprom statement said.

DIPLOMATIC MOVES

By late Sunday there were suggestions of a possible move toward a diplomatic solution.

A Putin spokesman said Czech Prime Minister Mirek Topolanek had told the Russian premier in a telephone conversation: "Ukraine's declaration is not part of the (main) protocol and only represents the opinion of the Ukrainian side."

The European Commission said it still believed the Ukrainian statement had no effect on the validity of the deal.

"Mr Barroso has called Mrs Tymoshenko and has agreed with her to separate the two documents. They are working out how to make a new terms of reference without a link to the (Ukrainian) declaration," the Commission said.

Valentin Zemlyansky, spokesman for Ukrainian state energy company Naftogaz, said: "Ukraine continues to guarantee its openness and is ready to ensure 100 percent transits of Russian gas across its territory."

Eastern and central Europe have borne the brunt of the gas supply disruptions, with Bulgaria shutting schools because it could not heat them and Slovakia saying it would re-start a nuclear reactor which it shut down last year.

In the Bulgarian capital Sofia, residents expressed anger.

"Half of Europe has become a hostage of the squabbling between Russia and Ukraine. This is pure blackmail, totally unacceptable and we should demand financial compensations," said Krasimira Dimitrova, 56.

Energy companies in the Balkans, where overnight temperatures reached as low as -17 degrees Celsius (1.4 Fahrenheit), have switched to alternative fuels and other suppliers to restore heating to hundreds of thousands of homes.

Russia says it has been subsidizing fuel supplies to Ukraine for years and now wants it to pay $450 per 1,000 cubic meters of gas. That is roughly in line with the price EU customers pay but a huge increase on the $179.5 Kiev paid last year

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Russia's Gazprom says Ukraine signs gas deal
MOSCOW/KIEV (Reuters) - Ukraine has removed conditions that had threatened a gas deal to resume Russian supplies to Europe, Russia's gas export monopoly said on Monday.

The removal of the additions, which Moscow described as a "mockery of common sense," offers the rival former Soviet republics a second chance of securing agreement to deploy monitors to check gas flows across Ukraine to Europe.

Supplies to Europe have been cut off for nearly a week in freezing temperatures after Russia accused Ukraine of siphoning off gas to make up for losses it has suffered since Moscow turned off the tap on January 1 in a dispute over gas prices.

A Gazprom statement said Kiev had signed the deal on deploying monitors to ensure smooth gas transit.

Russian Prime Minister Vladimir Putin's spokesman said: "We keep our fingers crossed that this is not another game and we really have a proper document."

Dmitry Peskov added that if so, international observers could start monitoring the supplies through Ukraine and Russian supplies could flow again.

The gas row is yet another power-play between the neighbors, whose relations have been strained since Ukraine elected pro-Western leaders after the "Orange revolution" in 2004 and tried to shrug off Russia's influence.

The European Union has tried to steer a neutral course between the two, and helped broker the deal over the weekend to allow monitors on Ukrainian territory. But the agreement foundered when Ukraine added conditions to the deal.

But the bloc's Czech presidency said on Monday the weekend agreement still held.

DELEGATION

Peskov said Russia had sent a delegation to Brussels for new talks on restoring its gas supplies to Europe and "to convey once again the position of the Russian Federation in this dispute."

"Gazprom is continuing to do whatever is possible to resume the transit and it will continue to do whatever is possible to resume the flows in the coming days," he told reporters.

Gazprom said the deal secured at the weekend would have to be signed again.

Russia has said it will turn the taps on only when the gas monitoring deal is signed by all sides and monitors are deployed.

Gazprom and Ukraine have said it will take at least 36 hours before gas reaches EU borders after flows resume, which means most countries will not get Russian gas before Wednesday.

The commercial dispute over gas prices has played out against a background of broader tensions between Ukraine, which is seeking to join the NATO alliance, and its giant eastern neighbor.

The EU gets a fifth of all its gas supplies from pipelines that run from Russia and then across Ukraine.

Eastern and central Europe have borne the brunt of the gas supply disruptions, with Bulgaria shutting schools because it could not heat them and Slovakia saying it would re-start a nuclear reactor which it shut down last year.

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Well, Ukraine now did it. No way out for Ukraine with this mess. With contract signed and monitors in place, how can Ukraine divert again the gas without being noticed?

The gas flow will resume to Europe, but no gas for Ukraine until a price is reached.

Since the Ukraine's behaviour is a very bad one, stealing the gas, accusing Russia, the last one signing the contrat, the one that changes the contrat and press have helped them, always showing Ukraine declarations in order to question Russia's reliability as energy provider, I believe now Russia before getting a new price for Ukraine, will want a declaration that prove's Russia inocence and Ukraine fault's regarding this mess. And it will be bad for Ukraine.

If it is Ukraine's fault of what it have done, the press have their big share of the fault. Why press never stopped to question if it is possible for Ukraine to divert all European gas? why press never showed Ukraine's capacity to storage gas? Because press is fighting against Russia.

Comments by FromPortugal