TOPICS > Politics

Russia, Ukraine Trade Blame Over Gas Shipments

BY Admin  January 13, 2009 at 6:30 PM EST

Gas pumping station in Russia; AP

Russia said it restored the gas flow meant for Europe through Ukraine on Tuesday morning, after the two countries agreed that independent monitors would observe the gas supply and ensure that Ukraine was not siphoning off any gas, as Moscow has alleged.

After turning on the gas taps, technicians at Gazprom, Russia’s state-controlled gas company, said the flows were partly restarted and then blocked.

“The taps on the Ukrainian side are simply closed,” said Sergei Kupriyanov, a Gazprom spokesman, quoted Reuters.

Ukraine told EU monitors that there were “technical difficulties” and the pressure of gas from Russia was too low.

EU monitors said a “very limited” amount of gas started flowing from the Russian pumping station at Sudzha on Tuesday, the BBC reported.

Gazprom cut off the gas supply to Ukraine earlier this month because of a dispute between the two countries over the price of gas and debt payments.

Gazprom is demanding that Ukraine pay $614 million for unpaid gas bills and pay $450 per 1,000 cubic meters of gas in 2009, similar to rates paid by EU customers but much higher than last year’s price of $179, reported Reuters.

Analysts in Kiev say Ukraine, already saddled with $30 billion in foreign debt maturing this year and other problems caused by the global economic crisis, cannot afford the new rate.

The gas shortage has affected 20 European countries in a region that gets about a quarter of its gas from Russia through pipelines in the Ukraine, according to the BBC. The Balkans were particularly hard-hit.

Slovakia, which depends on Russian gas, said it will restart an old Soviet nuclear plant over objections from the European Union, reported the International Herald Tribune. Elsewhere in Eastern Europe, the crisis has forced thousands of businesses to slow or stop production. Bulgaria has lost all of its gas supply and is relying on a two-day reserve.

After the 2008 contract expired, talks between Gazprom and Kiev stalled, leaving terms of gas shipments and transit fees unresolved.

“EU monitors are useful window dressing for both sides to climb down from the dead-end positions that they had worked themselves into,” Ed Chow, an analyst at the Center for Strategic and International Studies, told Bloomberg News. “Monitors by themselves do not solve any of the fundamental issues in the dispute.”