Rory Watson in Brussels
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Russia said today it will resume gas exports to Europe as soon as international monitors are in place in Ukraine to verify that none of the supplies are being illegally siphoned off as they transit the country.
The pledge came from Alexi Miller, the chief executive of Gazprom, the world's largest gas company, after a series of chaotic meetings in Brussels between European Union politicians and officials and Russian and Ukrainian representatives.
"Our agreement with the European Union is that once monitors are deployed in Ukraine and have access to the gas installations we will immediately resume 100 per cent of supplies to Europe," he said.
He added: "We really treasure our reputation as a reliable supplier and are prepared to supply Europe with as much gas as it needs."
Earlier, Mr Miller's counterpart at Ukraine's Naftogaz, Oleh Dubyna, told a meeting of European parliamentarians: "From today, I can guarantee that if natural gas comes to Ukraine from Russia it will be transported to Europe 100 per cent."
The European Commission President, Jose Manuel Barroso, has already received a political commitment from the Russian and Ukrainian prime ministers, Vladimir Putin and Yulia Tymoshenko that they will allow the gas supplies being sent through Ukraine to be monitored by independent experts.
The Commission aims to identify the members of the monitoring team later today and is in talks with Gazprom and Ukraine's Naftogaz to identify the centres where they would be based. There were predictions that the observers could be in place by Friday, but one official said it could be "a matter of a couple of days".
But given the time it takes for the gas to be transported across Ukraine, a country like Bulgaria, which is heavily dependent on the Russian exports and has declared a state of emergency because of the severe shortages, may not receive new supplies before the middle of next week.
After insisting for days that the gas conflict between Russia and Ukraine was a bilateral commercial dispute and that it would not mediate in the dispute, the European Union stepped in today to broker an end to the stalemate.
Mr Barroso and the European Parliament President, Hans-Gert Pöttering held separate meetings with Mr Miller and Mr Dubyna, warning them of the consequences if they failed to honour their commitments as supplier and transporter of gas to European consumers.
Despite the breakthrough, Russia and Ukraine continued to blame the other for the crisis which has robbed at least a dozen European countries of Russian gas in recent days.
Mr Miller accused Ukraine of not "living up to its commitments as a transit country" and maintained that under the European Energy Charter, countries which had suffered from the crisis had the right to sue Kiev.
Boris Tarasiuk, the chairman of the Ukraine parliament's Europe committee, retorted that Russia's move to increase the price of gas from $179.5 to $450 was "an attempt to destroy the Ukrainian economy" and that his country was "the subject of worldwide blackmail by Russia's mass media".
At no point during the day did the Russian and Ukrainian delegations meet, apart from a brief encounter between Mr Miller and Mr Dubyna. The Gazprom CEO made light of the fact, insisting that the two had already discussed the situation in Moscow the previous evening and had travelled to Brussels together.
But the absence of Russians at a special parliamentary hearing today on the gas crisis angered MEPs. Both delegations were invited, but only the Ukrainians attended.
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Ukraine on the other hand has economic regions and companies that depend on the transit of Russian natural gas.
Internal affairs are also unstable with Yuschenko and Tymoshenko blaming each other and Moscow trying to set Yanukovich back to power and punish Yuschenko for his support for Georgia.
Erik, Tallinn, Estonia
The bargaining positions are also different because Ukraine has fewer options. Their economy can't hand such big gas prize as 450 dollars. The only thing they can do is demand higher transit prizes.
Russia though has once again proved its unreliability and I hope Germany and Italy will realize it.
Erik, Tallinn, Estonia
Things are bad enough in the world already and now this.Swell !! Especially since we are talking about cutting off supplies that keep people alive and severally affect the economy of several countries.A military clash is next .I have no doubt.
mike, bellingham, USA
I am so glad that i live in Aussie Land!!!so much bickering going on between Russia and Ukraine how i see the problem is like this everyone should pay the same prices for the gas!!!not other European countries subsidizing them of course they are stealing the gas!!!It's not for NATO to get involve!
Vera , Adelaide, Australia
This is GREAT! Finally, the russians show their true face. It´s now time for the EU to quickly move over to nuclear and renewable energy. When we stop buying russian gas - no money to putin, no money to the russian military, no problems... :o)
Thomas, Stockholm, Sweden
Glenn, Brookly, USA ... don't be too smug about what is happening in Europe. Remember where a lot of your oil & gas comes from. Obama wants to renegotiate/pull out of NAFTA, that means you stand to lose your secure supplies of oil, gas, electricity , water, etc.
Malcolm C, Edmonton, Canada
China's import demand is puny -- last year the PRC imported about 5% of what Germany alone did. China will be a big market eventually, but not any time soon.
John, Doha,
Now Europe feels what dictatorship is like, This is what happen when one country or individual supplies resources needed by others. Europe has no power to dictate to Russia how to use its natural resources. Europe better finds other natural gas producers, they going to learn what tyranny is about
Michael Wilson, Conley, USA
it's very simple-- if you want product (gas), then pay for it the market price ($450). If you can't afford it, then use something else (wood, oil). If you steal, then you're sued and must go to jail. If Europe don't need Russian gas, then Russia will sell it to China etc
Leonid, Moscow, Russia
Howard of Basildon, What is wrong with you? We Americans are chuckling at what is happening to Western Europe! We feel bad for East Europeans but not France, Germany or Britain(the socialists in Britain, not the whole country). We wouldn't THINK of unleashing NATO in a situation like this!
Glenn, Brookly, USA
Very good politics:). Gas price 450$/1000 cubs but transit tarrifs 1.7$ for 1000 cubs/100km. Has somebody here calculated loses of ukraine?
Yuriy, Rokytno, Ukraine
The issue about alleged 'stealing' boils down to a simple question: how's obligated to provide 'techological' gas - i.e. gas used to power piping stations. Ukraine already agreed to show that secret part of the contract to euroburocrats. Why does Russia refuse?
Alex , Chicago, IL
Why solving all this nightmare is too slow.
Ordinary Ukrainians are yet paying full Europian gas price and for long time. But between them and cheap Russian gas there are huge number who make money in this simple, easy and highly criminalize business
Mikhail, Penza, Russia
how amusing; everyone yelling at everybody else. I was in Kiev the last time this happened and it's the same senario again. I really hate the European political structure. Read this for a different perspective-
http://www.middle-east-online.com/english/?id=29650
Igor, Honolulu, HI
Ukraine's pipeline length is 1500 km (the longest of 4). Moscow wants 450$/1000 cubs but transit fees leave 1.7$ per 1000cubs/100km. Days transit 300 mln cubs. Ukraine needs 21 mln/day technogas. Calculating: 300000x1.7x15=7650000$ - transit. 21000x450=9450000$ - technogas. Day loses - 1800000$.:)))
Yuriy, Rokytno, Ukraine
"NATO will have to think how to assist allies who suffer" UNQUOTE. Keywords here: "wil" (a "would" were more appropriate, hehe), "think" and "how". What a powerful statement. It is just as much of an awkward speech bubble as the Russian retorical threats of mid 90s to resist the NATO eastward expans
Van Zong, Berlin, Germany
New pipe lines being constructed by the Russians will bypass the Ukraine and other western surrogates, thus leaving them to the full economic support of the USA, a country that is facing a thousand trillion deficit in the year of 2009. Just not enough money left to bribe the Ukrainians.
RAVEN , DETROIT, USA
This Is Madness,Relying On Russian Gas Supplies This Has Shown A Fatal Flaw,This May Be A Russian Political Ploy Bringing Europe To Its Knees.
I Hope That The Useless eec Can See That New Ways Must Be Found Away From Russia.
Thomas, Surbiton,surrey, uk
NoOne can say , Ukrain is thief without PROOFS !!!
Sergiy, Kyiv, Ukraine
The lesson for us is that we need to be self sufficient in energy, which means 20 Nuclear Power Stations asap.
While they are being built how about getting some more gas storage in the U.K. to give us few weeks reserves. Portland Gas Storage might be a good strategic investment for the government.
Greg, Worthing, U.K.
Btw, it's impossible to transport gas with zero losses. I'd welcome even NATO intervention to make Putin and Yushchenko stand up and explain in plain words: was there any theft? If it wasn't then what the hell is going on? We would survive with the gas we already have - but what about poor Bulgary?
Sergei, Kiev, Ukraine
NATO should not be involved....
Russia cant monitor what goes on on Ukrainian territorry with gas transit, all russia can do is rely on transit agreement. AND FYI for those who mentioned about russians not wanting to allow EU monitor: READ THE NEWS: its ukraine who doesnt want to do it!!!!!!!!!
Ana, USA,
I think this says far more about the total lack of a realistic and sustainable European energy policy. There is something very wrong and very worrying when one country can hold so many others to ransom over gas. If this isn't the wake up call Europe needs then frankly I say good luck to us.
Ed, London, Uk
No disrespect to the Czechs in this matter, but now is not the time to allow amateurs to run the negotiation table. Presidency is far from professionality, so while those countries east of the Czech republic suffer,we witness a novice trying to sweep the factory floor with the wrong end of the brush
Jan, Bratislava, Slovakia
Many people are claiming that Europe is too reliant on Russian gas. It seems memories are short. Most of the affected countries were part of the former USSR and part of the USSR energy distribution network.
In light of the recent events I hope that Euro governments create good contingency plans.
Al, Monaco,
The good news in these chilly times that the Global Warming fanatics have gone very quiet. No more nonsense talk about windmills and nuclear power is now back on the agenda.
Mick Green, Birmingham, England
Have you noticed that Ukraine feel no need in gas? The gas supplies they made in their depositories lets them feel comfortable till April 2009.
It looks like Ukranians has prepared themselves for this game.
and that`s Europeans who freeze out.
Ildous Lutfullin, Kazan, Russia
Well Ukraine has won this war. It has offered EU to send monitors,welcoming them to Ukraine.Russians ofcourse dont allow any of them in (since they obviously are hiding their manipulations)-Ukraine has prooved its point.It has also secured the EU credit to repay Gazprom.Not bad
S.Simens, Rotterdam,
Just listening to BBC where they actually challenge the reality of the debt. No company would ever let the debt build up that high. The least its strange that Russia remembered the debt right in the winter. Russia has for while emerged as new threat to Europe. This only a part of political games.
jirikoo, Prague, BOHEMIA
Why refuse the presence of Russian observers, unless of course you are worried about getting caught.
Kurt, Boston, USA
Putin has engineered the dispute to have an exuse. Gazprom's gambled on higher prices, borrowed $50 billion to corner markets by buying all Asian gas, and to resell it to EU. However, gas prices are falling and Putin is losing cash. Finally a real answer
dave, exeter, UK
2 Ms Smirnoff
what right does EU have to "monitor" Ukraine?It is an independent country with practially NO cooperation with EU.EU is pursuing antiUkrainian policy for a sake of Turkey and Balkans for years.Ukraine has invited monitors,consider it as an act of good will
S.Simens, Rotterdam,
"Mr Piebalgs added that a dozen EU monitors would be sent to Ukraine today so that they would be able to check supplies as soon as they resumed. "
does it mean there was no monitoring all this time - so how can you know what was really happenning and Ukrane was not stealing gas?
Victoria Smirnoff, London, UK
Why do the "Western Democracies" need "Easter Totalitarian Gas" to stay alive?
Don't we have an excessive build up of "democracy" in Europe? Let's burn democratic democracy, surely that's a better source of energy than totalitarian natural gas. :)
Marcus, Sydney, Australia
Lets see NATO soldiers coming to rescue by cutting some wood for their allies. How else are they going to help, go to war over unpaid bills of a country which is not even a NATO member. in that case at least they won t face the questions about WMDs.
komil, London, uk
Quit complaining. Pay the bill and you'll get your gas. Or, get your own gas. How hard is this to understand?
Abzats, Honolulu, HI
Of cause NATO can help it`s allies, Mr. Volker is absolutely right here. They can drive dozen of destroyers by the Balkan coast, loaded with condensed butane. Or with blankets. Why not? It worked once.
Peter, Vladivostok, Russia
Demonise the Russians? Well goodness me!
Nothing quite like a little bit of over-acting to divert attention from failed policies and head-in-the-sand planning.
Terence Park, Burnley, UK
if either the ukranians or russians are innocent of any wrong doing then they should allow any international monitors to do theior jobs in monitoring supplies. but russia doesnt want to do things in an easy way and so places another hoop to jump through. have they something to hide?
Chendu, London,
Russia can barely meet its demand. http://www.newsweek.com/id/81557
Putin has engineered the dispute to have an exuse. Gazprom's gambled on higher prices, borrowed $50 billion to corner markets by buying all Asian gas, and to resell it to EU. However, gas prices are falling and Putin is losing cash
Thomas Boch, New York, USA
It is hard to understand why Europe allowed itself to become so dependent on a single source with an obviously high political risk without ensuring appropriate safeguards were in place. Couldn't they see this coming?
Glen, Melbourne,
Buy electric heaters!
Graeme, Edinburgh,
If russia dont want to sell their gas they don't have to if it was being stolen i know i wouldnt to take that guys shipping analogy about ukrain owning 4 of 5 i just would ship atall they can always save the gasfor a later date/ sell it to china
Edward Smith, Birkenhead, UK
I see the Americans are going to use NATO against Russia? Well this should solve the problem, Russia and Europe destroyed while America as usual fights its war on someone else's land.
When will we realise NATO was to protect the Americans NOT Europe or Russia, now USA ratchets up the New Cold War
Howard, Basildon, England
Gazprom is just the start. Western investors in Russian shares and bonds are going to get ripped off so the FSA should prevent Russian companies raising capital in London.
michael, london, uk
it seems that this US diplomat is trying very hard to turn a purely commercial dispute into a political standoff between Russia and Nato. if so, this dispute will never get resolve. Russia will loose the credibility as a reliable partner. Bush wins, Putin loses, ordinary europeans suffer.
Sergey, NYC, USA
It makes me so proud of our species to see how well we all get on together.
If its not religion killing us its greed.
Maybe one day the human race will mature but i doubt it.
SGeeves, Canterbury, Earth
Mykyta actually russia pays .3 euros more than the market transit fee. Ukraine paid 250 euros less than the market gass price.
spin it how ever you want. The politics are comming from the EU/US and Ukraine puppets.
John, Sydney, Australia
Ukraine pays for its gas...... When this crisis happened in 2006, Ukraine paid for the gas. It was always done on time.. The problem is how Russia out of the blue said Ukraine owes Russia $2.5Billion after the Georgian war, once Ukraine supported Georgia... Its another Russian tactic to have control
Daniel Dobrjanski, Guelph, Canada
I applaud Russia for this move, thanks to them now here in Europe we will be forced to diversify more our energy resources and to invest seriously in energy indipendence.
In the long term this crisis will really help Europe and hurt a lot Russia, Putin and Medvenev should have been smarter.
Daniele, Roma, Italy
R: We sell you gas for $250
U: No, we want it for $200
R: Ok, then you'll have to pay $418 for it.
Such negotiations are appropriate for kindergarten not for a major gas company. This is threatening. Today Russians argue in such childish way about gas prices. Tomorrow it may be nuclear weapons or..
Kate, Chisinau,
Why is it so cold in Europe when we are suffering so badly from the effects of man made CO2 induced global warming ?
PaulW, Liverpool,
This is not about politics or anything else other than a typical power struggle between parties (i.e. dividing up the spoils) wrapped in the clothes of a political battle. The Putin regime wants more money to add to the $80bln they've already stolen via Gasprom. Too bad you lot don't understand
Alex, Kyiv, Ukraine
All the promises made by Russia not to cut-off, and Ukraine not to siphon-off, do not remove the possibility of price-hikes by Russia and future non-payment by Ukraine. This is a lesson to Europe, - WE MUST BE MORE ENERGY SELF-SUFFICIENT and not rely on, or invest in, regimes with dodgy motives.
Howard, London, UK
NATO should not only warn Russia but it should also tell it how much it should charge for its natural gas. And oil. And ore. The Russians deciding what to do with their natural resources !!! What's next?
Chris, Toronto, Canada
Not correct Richard. Perhaps you should read the contract first. Gazprom supplies gas to the transit system. Thats the limit of the contractual obligation. Therefore, Ukraine is 'stealing' from the European purchasers.
Amy, Sydney, Australia
sure except russia is refusing to allow the neutral european powers to simply send observers demanding they be able to send in their own. considering that russia spent all of '08 trying to prove they are a big power this seems yet another attempt to remind the world they are still relevent post USSR
Brian, Victoria , Canada
I am surprised that putin does not take up the role of Alexei Miller as head of Gazprom as it's he who is calling the shots.
Putin would probably feel more comfortable looking after Gazprom as he is clearly punching above his political weight as prime minister of Russia.
Gino, Hastings, England
The price of gas for Ukraine, and deliveries to Europe have nothing in common. Russia does not supply gas only to Ukraine. Transport pipeline to Europe shut down by Ukraine. Yushchenko and Georgian President is ordering the U.S. against Russia. Europe hostage in the American game
Yuri, Moscow,
At the end of the day, it really has nothing to do with gas, just Russia bullying the Ukraine and, when not getting anywhere, trying to get Europe to do its bullying for them!
Gazprom needn't call in an entire government to solve economic issues,
Ryan, Flitwick, UK
Russia is rapidly becoming an ever more potent threat to the west. In the 80's and 90's we concentrated on the IRA instead of the Islamist threat and now we concentrate on the Islamist threat and not Russia. We need to be fuel independent from Russia as quickly as possible.
J Nowland, Leeds, United Kingdom
Why is russia being blamed. Ukraine is stealing gas, but because they are friend with US and West its k then. Other countries payed for the gas and they are stealing it. If you dont like price russia is selling find somewhere else to buy it from dont use other countries to blackmail russia.
marko, Birmingham, uk
"Russia had decided to punish Ukraine by cutting its gas and later accused it of stealing supplies that were intended for Europe."
Source? This statement is hardly news but rather opinion... Article is poorly written.
Wolk, Toronto, Canada
It is evidently that all of us are victims of political dispute of Russia and Ukraine. I am writing this from cold Sarajevo, Bosnia and Herzegovina.People here are freezing on temperatures between -5 to - 13 degrees C. Over 100 000 households are not only without heating.It is horrible.
Vildana Hajdarević, Sarajevo, Bosnia and Herzegovina
I am wonder, where all of you are getting your info from? Gazprom, state owned monopoly has a dispute with Neftegas, Ukrainian company, why doesn't it go to Stockholm arbitration as they have it in the contracts and sues Neftegas?! Instead this Mutin/Pedvedev owned corporation cuts supplies to you
George, New York,
What does Ukraine gain from this? Gas flows are monitored so stealing does not work - it gets counted in at one end and delivered at the other. So they gain nothing except a lot of political and social unrest.
What does Russia gain from this? This is their national game: chess.
Patrick, Warsaw, Poland
Boris,
Imagine you are a supplier (Russia) and you need to get your product - overseas. There are only 5 ships in the world, and one supplier (Ukraine) owns 4 of them (80% of the gas pipes going to the EU).
Are you in a strong position to make demands? No You'll lose
Go build ships/pipelines first
Jake, New York, USA
Russia has every right to be paid on time for its gas. If Ukraine cannot afford the gas it should go cold, that's how it works for everyone else.
Crowther, Silsden,
This fiasco with Russia simply demonstrates that there are too many variables in play, to depend on Russian supplies of gas which has been capitalised from exploration to tans-shipment with western capital, which would have been much better employed in the construction of nuclear power stations at home.
Charles Smyth, Belfast, Northern Ireland
NATO needs to stay out of this. It is not a military issue. Europe can only blame itself. Europe has been playing in Russia's back yard, is highly dependent on Russian energy, and is very weak militarily. The shock is that anyone at all is surprised about this situation. Stratfor predicted it.
Tom, Philadelphia, US
why don't you mention that the reason "Russia flatly refused to turn the pipeline back on" is the refusal by Ukraine to let Russian observers going along with the european mission?
Sergey, NYC, USA
and so now what? We have NATO make war to Russia because a would-be NATO candidate with a quasi-puppet government installed with european money is stealing the gas which is destined for Europe and not paying its bills?!? Have all the politicians in Washington really gone bonkers?!?
Pietro B, La Spezia, Italy
demand? hahahah go pay ur bills first... dont be blaming the russians because ur country arent paying the bill. thats the problem with US & europe these days, everything is everybody else's fault except theirs. hey, lets not pay our bills and blame it on the bad russians....
Tom, California, USA
It's a pity we don't have someone like Putin to look after our interests. This predictable, seemingly annual, affair is a salutary warning concerning making ourselves (the EU, at least) energy independent.
Dirk Bruere, Bedford , England
I think this is an example of why many firms do not want to do business with Russia. They seem to make many excuses for not completing contracts, nationalizing businesses,etc. In this case Ukraine is in the middle - a scapegoat for Russian duplicity.
Unfortunate that those with no say, suffer.
Phil , Incline Village, USA
Ukraines fault - 100 %
Dave, Lincoln,
It should be mentioned also that this dispute involves tariffs for TRANSPORTING gas as well.
Ukraine has one of the lowest gas transit prices in Europe.
Why should Ukraine subsidise cheap gas transit tariffs?
If gas price is increased, let the transit price be increased as well.
Mykyta, Kyiv, Ukraine
Well, if one has to pay for transit at charges e.g. $4US/100km, like i've read, are in Slovakia, and you have to pump them over 2000-3000km it is natural that you have to pay extra for the transport. I think that under this circumstances, UA can pay less than other countries situated further in west
Piotr Surówka, Wroclaw, Poland
If Ukraine was stealing the gas intended for Europe then surely they are the problem. Do NATO really expect Russia tgo send gas along a pipe line to get stolen?
paul, london, uk
Ukraine blocked the pipe. How can you put gas in the closed pipe. Again, the Americans paid for a political order Ukraine extradited IMF loan of 16 billion dollars. Europe should be to blame for their ills USA and Ukraine. Russia, in this case, only the goal of political games.
Yuri, Moskow, Russia
Don't be fooled by all this banter between the Ukraine and Russia it's a total ploy to increase gas prices, so tell Russia to keep their gas and we will revert to nuclear and coal fired powered stations,which will create millions of jobs and take us out of this recession, Gordon give me the job!
william thomson, lincoln, u k
Robert, imagine you are the vendor, who is sending multiple shipments to the buyer overseas. You sent the first shipment - it has never been delivered. Moreover, shipping service telling buyer that you never sent shipment ! despite receipt in your hand :-) Will you continue shipments ?
boris, New York, USA
Thank you Russia! Thank you Ukraine! Now Europe must really do something for a really reliable source of energy. Nuclear plants or something else, I don t know what, but there are solutions. This means investors, jobs and all it needs for stepping out of crisis.
Thanks again, Russia and Ukraine !
Alex Coman, Medgidia, Romania
Steve why should they reneg on valid legal binding contracts and Russia gets accused? They are the ones stealing gas and turning it off, there are taps on the Ukranian side, they are just pushing the gas to thier storage areas.
Darren, London , UK
Gazprom's Miller is wrong. Under the terms of any supply contract, it is Gazprom who will be sued for non delivery. Gazprom in turn can counter sue Ukraine's Inogate for failing to transit Gas supplies.
The amounts will depend on whether consequential loss is included.
Richard, Bucharest,
Why should the Ukrainians be able to buy subsidised gas.
It is us who are going to pay for it?
Steve Byrne, christchurch, UK