Russia/Ukraine

Russia restores gas flow to Ukraine

Article published on the 2009-01-20 Latest update 2009-01-20 15:34 TU

(Photo : AFP)

After a two-week standoff that kept millions of people in Eastern Europe without heat in the depths of winter, Russia resumed delivering natural gas Tuesday to Ukraine and, via its pipelines, to the rest of Europe. After signing a 10-year deal, Gazprom officials called for an international mechanism to avoid future gas disputes.

"The transit of Russian gas to Europe via Ukraine, and shipment of gas to Ukrainian customers, were started in accordance with the agreements" reached during the weekend, Russian gas giant Gazprom announced in a statement.

In Kiev, a spokesperson for Ukrainian pipeline operator Ukrtransgaz confirmed that Russian gas was flowing into Ukrainian pipelines and would be forwarded to Europe.

"The gas has arrived on Ukrainian territory," said spokeswoman Inna Koval, adding that after some technical issues were resolved, "we will be able to resume transit."

There was no sign yet, however, of gas reaching downstream customers in Europe.

But restoring gas to the Ukraine carried a big price tag. Gazprom confirmed Tuesday that Ukraine would pay almost double for the Russian gas.

In the first quarter of 2009, Ukrainians will pay 360 dollars (278 euros) per 1,000 cubic metres of gas. Last year they paid only 179.50 dollars (138 euros) on average. But these prices remain below the 450 dollars (348 euros) that customers pay in the European Union.

The crisis erupted on 1 January when Russia cut gas to Ukraine's domestic market over unpaid debts and demands for a higher price in 2009. The dispute escalated when Moscow on 7 January halted all supplies for Europe transiting through Ukraine, accusing Kiev of stealing gas. Kiev denied the allegation.

Russia supplies about one-quarter of the EU's natural gas and pumps 80 percent of this via Ukraine.