Russia/Ukraine/EU

Continuing confusion in gas dispute with hopes of resolution

Article published on the 2009-01-12 Latest update 2009-01-12 16:08 TU

Jaslovske Bohunice nuclear power plant in Slovakia.
(Photo: Reuters)

The ongoing dispute over natural gas delivery between Russia and Ukraine still shows no sign of being resolved quickly. The EU say that gas will be restored by 0800 UT Tuesday, while the Russian gas company Gazprom insists that international monitors must be in place before it will restart delivery.

Ukraine said they had not signed a deal to resume Russian gas supplies to Europe, but instead had rewritten the documents.

“We didn’t sign anything. We just reformulated the documents,” said Yulia Tymoshenko, the Ukrainian Prime Minister.

A deal was to have been reached in the dispute, which has affected up to 18 countries across Europe. But there were problems with amendments made by the Ukrainians, and there are concerns over payment for technical gas, which is required to maintain the pipeline pressure.

“It’s becoming more and more surreal by the minute,” said Moscow correspondent Luke Harding. “What we’ve seen in principle is a deal; Ukraine has signed an agreement together with the EU and Russia, to allow the transit of supplies to the EU for the first time since last Wednesday.”

“There’s another outstanding issue,” he continued. “Who pays for the gas that is needed to get these shipments flowing again, via Ukraine to Europe?”

“It’s not clear. The Russians want the Ukrainians to pay for [the technical gas], and the Ukrainians want the Russians to pay for it,” said Harding. “I suspect that until this mess is sorted out, there’ll be no gas.”

Tymoshenko insisted that the Ukraine would continue to use Russian gas to for pumping gas in transit through the country.

Gazprom reiterated their stance, with a spokesperson saying that Ukraine’s position “contradicts common sense and the existing contract.”

A number of EU observer teams are now monitoring the flow of pipelines in both countries.

A technician in the control centre of a gas compressor station in Sudzha, Russia.
(Photo: Reuters)

“They are at compressor stations on both sides of the Russian/Ukrainian border, so they are there, ready and waiting … But I sense we’re not quite there yet,” said Harding.

Indeed, if Russia insists on payment for transit gas, Ukraine could have difficulties in finding the cash.

“Ukraine is in a pretty desperate state economically, it’s already been bailed out by the [International Monetary Fund]. It’s basically broke,” said Harding.

In other developments, Slovakia’s energy problems continue to be compounded by the crisis. The Slovak government declared a state of national emergency last week. And following a fire at the Novaky power plant, the government warned they may be forced to restart the Jaslovske Bohunice nuclear reactor.

But the crisis has not yet affected depressed oil prices, with a barrel losing around two dollars on Monday, amid continuing worries about the world financial crisis.