Gazprom expects gas deal signed Friday
MOSCOW/KIEV (Reuters) - The European Union sought to finalise details Friday of a gas monitoring deal to allow the resumption of gas supplies to Europe via Ukraine, which have been cut off for days over a pricing row.
Czech Prime Minister Mirek Topolanek, whose country holds the EU presidency, flew to Kiev to meet Ukraine's leaders and "fine-tune the terms of the monitoring mission," a Czech source said.
The nine-day crisis cut gas supplies to hundreds of thousands of people in the Balkans, forced factories to shut down and disrupted deliveries as far west as France and Germany, while the continent faced freezing mid-winter temperatures.
The European Union receives a quarter of its gas supplies from Russia, 80 percent of which pass through Ukraine.
Alexei Miller, head of Russia's state-controlled gas monopoly Gazprom, said Ukraine had given verbal agreement for deployment of the monitors.
"As soon as the document has been signed... and observers are ready for practical work on the gas stations, transit of gas via Ukraine will be possible," he said in a statement.
The presence of monitoring missions along the transit routes for Russian gas will reassure Moscow that the gas it pumps across Ukraine is not being siphoned off by Kiev.
Moscow cited this allegation -- denied by Ukraine -- as its reason for shutting off gas through its ex-Soviet neighbour earlier this week.
Obstacles to a deal remained, and the head of Ukraine's state-run energy company Naftogaz said talks over the last two days with Gazprom had made no progress.
Naftogaz and Gazprom traded accusations Friday that their own monitors were being refused access by the other side. Even once the monitors are in place, it could take days before Russian gas shipped via Ukraine reaches Europe again.
Resuming the flows involves building up pressure in the pipeline network, and the large distances involved mean that, once moving, the gas will take time to reach customers.
The gas is likely to be delivered only to Europe, not Ukraine itself, since Moscow and Kiev have yet to agree a price for the gas, subsidised since Soviet times. Russia has repeatedly said Ukraine must now pay the going market rate.
Russian President Dmitry Medvedev said Ukraine must pay a "normal, balanced, European price" for gas, without discounts.
He said last year Russia sold gas to Ukraine for $179.5 (118.56 pounds) per thousand cubic metres, but Ukrainian consumers paid $320. "That profit margin went into the pockets of unknown structures, which most likely represent someone's corrupt interests," he said in remarks broadcast on Vesti-24 television.
ALTERNATIVE SUPPLIERS
The damaging shutdown in Russian supplies has revived calls within the European Union to find other suppliers, although real diversification cannot happen quickly as alternative pipelines do not yet have enough gas to fill them.
Hungary's Energy Minister Csaba Molnar, whose country depends on Russia for 70 percent of its gas needs, said the EU must get financially involved in the Nabucco pipeline which aims to transport Caspian gas into central Europe.
Eastern and central Europe have borne the brunt of the dispute, with many countries forced to seek gas from elsewhere or draw on their storage reserves.
The Czech Republic said Friday it would provide about 4 million cubic metres of gas per day to its neighbour Slovakia, which declared a state of emergency over its gas supplies.
Bulgaria's state gas monopoly Bulgargaz has completely cut gas flows to 72 big industrial consumers and sharply lowered deliveries to another 153 due to limited domestic reserves.
The dispute between Kiev and its former Soviet master follows tensions over Ukraine's efforts to join NATO, a move bitterly opposed by Moscow and viewed with wariness even by European members of the alliance and by investors.
Ukraine has been beset for months by political squabbling between President Viktor Yushchenko and his former ally, Prime Minister Yulia Tymoshenko, notably over ties with Russia.
Russia cut off gas for Ukraine's domestic consumption on January 1 in a row over pricing and debts. Officials from both sides met EU officials in Brussels Thursday where the 27-nation bloc sought an end to the spat.
Supplies to 18 countries have been disrupted by the dispute.