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Europe gas crisis worsening: Putin

Russian Prime Minister Vladimir Putin warned that a European gas crisis was "worsening" despite EU mediation efforts, as a transit deal with Ukraine failed to materialise.

world Updated: Jan 10, 2009 19:37 IST
Jan Flemr

Russian Prime Minister Vladimir Putin warned on Saturday that a European gas crisis was "worsening" despite EU mediation efforts, as a transit deal with Ukraine failed to materialise.

Meeting Putin at the Russian leader's country residence, Czech Prime Minister Mirek Topolanek, representing the EU, vowed he would not leave the region until Russia gas started flowing again to Europe through Ukraine.

"Despite all the efforts that have been made, the crisis is worsening," Putin said as he began talks with Topolanek.

"It is the Ukrainian leadership that is making it worse," Putin said.

In Kiev meanwhile, the Ukrainian president's office announced it would step in to help some of those countries suffering from the crisis.

Countries across central Europe that are highly dependent on Russian gas supplies have closed factories, suspended schools and cut heating to homes because of the gas supply cuts that have resulted from the Russia-Ukraine row.

A spokesman for the Czech EU presidency had expressed cautious optimism ahead of the talks with Putin, saying that "trust in an agreement got a boost on Friday" after Topolanek's meetings with Ukrainian leaders in Kiev.

Topolanek suggested that a "rift" between Ukrainian President Viktor Yushchenko and Prime Minister Yulia Tymoshenko had hampered efforts to resume transit of Russian gas, but claimed to have "overcome" this problem in Kiev.

"You have done the impossible," Putin replied.

But Russian energy giant Gazprom, which cut off all supplies bound for Europe through pipelines in Ukraine this week arguing that Kiev was stealing the gas, accused Ukrainian President Viktor Yushchenko of delaying any deal.

Ukraine has denied the Russian charge that it was illegally siphoning gas.

Ukraine's presidency announced on Saturday it would use its own supplies to help two countries caught up in the crisis.

"Ukraine will supply the Republic of Bulgaria and the Republic of Moldova with two million cubic metres a day of Ukrainian natural gas from its own reserves starting from January 10," the presidency said in a statement.

The sticking point in negotiations to resolve the crisis appears to be a refusal by Ukraine to sign an agreement proposed by Russia for the deployment of EU, Russian and Ukrainian monitors to check gas flows through Ukraine.

"We hope you can convince the Ukrainian party of the necessity to sign the document" that sets terms for sending international monitors to key gas pipeline sites, Putin said at Saturday's meeting.

Gazprom spokesman Sergei Kupriyanov put it more bluntly: "The Ukrainian president's decision, or lack of decision, is once again hampering our gas supplies," he said.

With much of Europe in the grip of a cold snap that has sent temperatures far below freezing and numerous countries heavily or completely dependent on Russian gas, the European Union has stepped in to broker a deal.

The European Union depends on Russian gas pumped via Ukraine for around 20 percent of its total gas consumption despite attempts to diversify supplies.

Russia has said it will resume pumping gas only after Ukraine signs the agreement for placing international monitors at key gas transit sites.

Even after the dispute over the transit across Ukraine is resolved, Kiev and Moscow still have to resolve their dispute over the gas Gazprom supplies to the domestic Ukrainian market.

Thousands of homes were left without hot water in southern Ukraine on Friday because of the gas crisis, as companies across the country were forced to reduce operations and schools were closed.

Gazprom said Friday there had been "no progress" in the negotiations with Ukraine and that Kiev would have to pay around 470 dollars per thousand cubic metres of gas in the first quarter of 2009.

Ukraine paid 179.5 dollars in 2008, far less than what EU states pay. Russia offered a price of 250 dollars last month, but Ukraine rejected it. Russia says Kiev must start immediately paying the same rates as other European states.