Russia gas deal collapses

12th January 2009, Comments 0 comments

The dispute between ex-Soviet giants Russia and Ukraine over gas payment and prices has presented the EU with one of its worst-ever energy crises and has raised urgent questions about the reliability of supply from Russia.

Moscow -- An EU-brokered accord on terms for Russia to resume gas supply to Europe collapsed Sunday when Russia accused Ukraine of secretly altering the deal and declared it null and void.

"I am ordering the government not to accept the document signed yesterday," Russian President Dmitry Medvedev said in televised remarks. "We are obliged to consider the document signed as null and void."

The breakdown came as a huge swath of central Europe suffered for a sixth consecutive day from the abupt cut-off of Russian natural gas supply that has left homes without heat and idled factories and schools.

The dispute between ex-Soviet giants Russia and Ukraine over gas payment and prices has presented the EU with one of its worst-ever energy crises and has raised urgent questions about the reliability of supply from Russia.

Medvedev and other senior Russian officials including Prime Minister Vladimir Putin charged that Ukraine had added phrases to the accord already signed by Russia and the EU that eviscerated the accord of its purpose.

Putin telephoned European Commission President Jose Manuel Barroso and informed him that the modifications introduced by Ukraine were "unacceptable" to Russia, news agencies in Moscow reported.

Commission spokesman Ferran Tarradellas later said Kiev had agreed to re-sign the paperwork, although there was no confirmation from Ukraine.

The agreement in question laid out terms for international monitors to check the flow of natural gas transiting through pipelines in Ukraine from Russia to customers in Europe.

Russia and the EU signed the accord on Saturday and Ukrainian Prime Minister Yulia Tymoshenko announced in the early hours of Sunday after talks with Czech Prime Minister Mirek Topolanek that Kiev had signed the pact as well.

Tymoshenko told reporters after that meeting however that Ukraine wanted the international monitors to confirm publicly that Ukraine had fulfilled its gas transit obligations and was not "stealing" gas as Russia has charged.

Russian Foreign Minister Sergei Lavrov said the amendments to the text made by Ukraine, apparently in a hand-written annex to the Russia-EU accord, "simply contradict the document signed by us and the European Union."

The text of the agreement signed by Ukraine was not made public and top Ukrainian officials involved in the negotiations on the monitoring deal could not immediately be reached for comment after the Russian rejection of the pact.

Valentin Zemlyansky, spokesman for Ukraine's national gas company Naftogaz, was quoted by Interfax-Ukraine however as saying that Kiev was ready to resume transit of Russian gas to Europe.

"We confirm all prior guarantees on resuming transit and on having it monitored by independent observers," he said.

Shortly before Medvedev announced Russia's rejection of the modified agreement, the European Commission said in Brussels that it had "taken note of a Ukrainian declaration" that it had received "in the afternoon."

Commission spokesman Ferran Tarrabellas told AFP however that, for the EU at least, "this declaration changes nothing in the agreement."

Putin said earlier that the gas conflict with Ukraine had already cost Russian gas giant Gazprom 800 million dollars (600 million euros) in lost revenue.

"Europe has to give out a clear and comprehensible signal... to Ukraine so that (Kiev) behaves in a normal and civilised way," Russian news agencies cited Putin as saying in an interview with German television.

Christopher Boian/AFP/Expatica

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