By Gennady Novik
SUDZHA, Russia (Reuters) - Russia started pumping gas to Europe through Ukraine on Tuesday for the first time since a contract dispute halted supplies to many European countries nearly a week ago.
The row, which left European countries struggling to find alternative energy supplies as winter temperatures dropped below freezing, is still not fully resolved and the gas is expected to take up to 36 hours to reach European pipelines fed by Ukraine.
"Perhaps we can take a breath of relief. But we are staying on alert because there is no victory by far," Czech Industry Minister Martin Riman, whose country holds the European Union's presidency, told Czech television.
"The dispute at the beginning of the crisis is still unresolved. If the Ukrainians and the Russians remain entrenched in their positions, this could be again reflected on the European scale."
A Reuters reporter at Russia's Sudzha pumping station near the border with Ukraine said the gas taps were opened soon after 10:00 a.m. (7 a.m. British time).
"Gas is now flowing through the first line," said a technician at the pumping station, operated by Russian gas export monopoly Gazprom.
The gas is expected to take between 24 and 36 hours to pass into waiting European pipelines. Officials in Moscow and Brussels said they could not be certain transit flows had been restored until the gas reached the border of the EU.
Moscow is still not supplying gas for Ukraine itself because of their contract dispute, and Russian officials said differences with Kiev over how to ensure transit to Europe could still create problems.
Europe depends on Russia for a quarter of its gas supplies and most of those volumes are shipped though Ukraine, a former Soviet republic whose pro-Western leaders have angered the Kremlin by seeking to join the NATO military alliance.
The disruption, which saw factories shut for lack of fuel, has dented the reputation of both Moscow and Kiev as energy sources and prompted a search for new supply routes.
Russia cut off gas to Ukraine itself on January 1 after failing to reach agreement with Kiev on gas fees. A week later it halted transit flows too, saying Ukraine was stealing gas intended for Europe. Kiev accused Moscow of using energy blackmail.
The resumption came after an EU-brokered deal to deploy international monitors to strategic points along the pipeline route to reassure Russia that Ukraine was not siphoning off transit gas.
ENERGY DEPENDENCE
Some 18 European countries suffered disruptions to their gas supplies. Eastern Europe and the Balkans bore the brunt of the problems.
Bulgaria said it would ask the European Union to provide 400 million euros (365 million pounds) in aid to help ease its dependence on Russia, its sole gas supplier, by expanding storage and building pipeline links to Greece and Romania.
Bulgaria, like Slovakia, said it might be forced to restart a nuclear reactor to produce enough electricity.
The gas row marks yet another power-play between Moscow and Kiev, whose relations have been strained since Ukraine elected pro-Western leaders after the "Orange revolution" in 2004 and applied to join NATO military.
Analysts say Russia, though it insists it was not to blame for the disruption, has suffered damage to its standing in Europe, its most lucrative gas market and biggest trading partner.
"Moscow seems to have managed to secure the safe transit of Russian gas to Europe. Yet this is a Pyrrhic victory for Russia," Russia's state-controlled VTB bank said in a research note. "Russia's image as a reliable energy supplier is hurt."
Western diplomats say Ukraine's reputation has suffered too, and the economic impact could be even worse.
Gazprom is demanding that Kiev hand over $614 million (418 million pounds) in unpaid gas bills and pay $450 per 1,000 cubic metres of gas in 2009 -- similar to rates paid by EU customers but a big rise on last year's price of $179.5.
Ukraine is likely to struggle to absorb those costs as its economy -- based on steel and chemical exports -- has been hit hard by the global slowdown and its hryvnia currency has experienced sharp falls.
Ukraine has said it has ample stockpiles of gas but it has restricted supplies to some industrial customers, a measure that could compound economic problems.
