Saturday, January 17, 2009

A spokesman for Russia's energy giant Gazprom says he expects deal with Ukraine on Saturday.

The prime ministers of Russia and Ukraine are meeting in Moscow in an effort to end the dispute disrupting supplies of Russian gas to Europe.

The EU has urged Kiev and Moscow to prove they are "credible" partners and said it was their "last chance".

Almost 20 countries in Europe have been affected by the energy crisis.

Russia uses pipes throughout Ukraine to supply western Europe, but it switched off the gas this month amid payment and theft allegations.

A spokesman for Russia's energy giant Gazprom said he expected a deal to be signed on Saturday to resolve the dispute with Ukraine.

Some central and east European states have been reduced to rationing gas, while others have been seeking alternatives to the pipelines carrying Russian gas via Ukraine.
The BBC's Richard Galpin in Moscow says Brussels stepped up pressure to bring an end to the EU's worst ever energy crisis, ahead of Saturday's meeting between Russian Prime Minister Vladimir Putin and Ukrainian PM Yulia Tymoshenko.

European Commission spokesman Johannes Laitenberger said the talks "offer the last and best chance for Russia and Ukraine to demonstrate they are serious about resolving this dispute".

"The gas must flow. We will regard this period as a test case for judging whether or not they are credible partners."

EU states import a quarter of their gas from Russia and 80% of supplies come via Ukraine.

Russia halted supplies of gas to Ukraine on 1 January after talks on the price Kiev should pay in 2009 collapsed.

A week later it cut the supply to Europe via Ukraine, saying it was forced to do so because Kiev was stealing the gas.

Ukrainian officials deny the allegation and accuse Russia of provoking the crisis.

Rival positions

Mr Putin, fresh from a visit to Germany, one of Moscow's biggest gas clients, said on Friday that a deal could be nearer after he discussed the formation of a gas transit consortium.

He said a deal was being brokered between Russia's Gazprom and EU firms to cover part of the cost of pumping gas from Russia to Europe.

It is not clear whether Ukraine would accept such a deal.
Meanwhile, divisions exist in Ukraine over the domestic supply and transit supplies.

Ukrainian President Viktor Yushchenko has said the two contracts were linked but Mrs Tymoshenko, his political rival, argued they were not connected.

"The issue of natural gas supplies to Ukraine and the issue of transit are interlinked and must be discussed as a single package," Mr Yushchenko's office said on the eve of the Moscow talks.

Speaking the same day, Mrs Tymoshenko said: "The Ukrainian government does not link the issue of concluding an agreement on [Russian] gas supplies to Ukraine with the issue of resuming gas transit to Europe."

Such a link, she added, would be "groundless and unfair".

She also demanded that Ukraine speak with one voice in the negotiations.

"Simply speaking, I need two things: Don't throw a spoke in the wheel and don't stab any backs," she said in Kiev.

Russian President Dmitry Medvedev has invited EU leaders to an emergency gas summit on Saturday but it appears that only envoys will be sent, including EU Energy Commissioner Andries Pielbags.

Russian Foreign Minister Sergei Lavrov was scathing about the decision not to send EU heads of state.

"We expect anyone interested in resolving the problem as soon as possible to come to the summit being held in Moscow tomorrow," he said on Friday.

He urged the EU to "show its famous solidarity" and put pressure on Ukraine.