By Daryna Krasnolutska and Lucian Kim
Jan. 11 (Bloomberg) -- Ukraine signed an accord with Russia and the European Union on monitoring transit gas through its territory, setting the stage for the resumption of supplies to Europe after four days of disruption amid freezing temperatures.
Czech Prime Minister Mirek Topolanek, who represents the EU, secured the agreement of Ukrainian Prime Minister Yulia Timoshenko in Kiev, after talks with Russian Prime Minister Vladimir Putin yesterday at his residence outside Moscow.
The gas shutdown, triggered by Russia’s dispute with Ukraine over prices and debt, renewed calls in Europe to develop nuclear power and alternative sources of energy. Fuel supplies are dwindling as temperatures as low as minus 15 degrees Celsius (5 degrees Fahrenheit) in the Balkans spur energy demand.
“In some eastern European countries people are sitting there without heating,” said Bernhard Jeggle, an analyst at Landesbank Baden-Wuerttemberg in Stuttgart. “They’re in a pretty tough situation, but that should be over soon.”
The accord was signed yesterday in Moscow by Russian Deputy Prime Minister Igor Sechin, OAO Gazprom Chief Executive Officer Alexei Miller and Czech Trade Minister Martin Riman, according to Russian state broadcaster Vesti-24.
“Ukraine signed the protocol so that Ukraine is not a barrier for Russia to resume gas deliveries to the European Union,” Timoshenko told reporters. Topolanek said Ukraine had met all conditions for Russia to resume gas shipments.
Shuttle Diplomacy
Russia, Ukraine and the EU struck an accord in principle Jan. 8 on monitoring flows of the fuel, paving the way for the resumption of deliveries to the 27-nation bloc. Since then the deal has been held up by disputes on how to deploy monitors.
Earlier yesterday Topolanek said the Ukrainian leadership gave him verbal assurances that Russian experts will be allowed to monitor transit shipments in Ukraine, according to Vesti. At the same time, international monitors will check flows into the Ukrainian pipeline network from Russian territory, he said.
His role as EU mediator is reminiscent of French President Nicolas Sarkozy’s shuttle diplomacy between Moscow and Tbilisi during Russia’s invasion of Georgia in August. France, which held the EU presidency at the time, was instrumental in ending the five-day war.
Ukraine and Georgia, both former Soviet republics, have strained relations with Russia in their efforts to join the European Union and the North Atlantic Treaty Organization.
Gas Prices
Natural-gas prices in the U.K., Europe’s largest market, initially fell this week on speculation gas could soon be flowing again through Ukraine after EU officials brokered a deal. Gazprom halted transit flows on Jan. 7 after accusing Ukraine of diverting gas intended for other buyers for its own use, a charge denied by the country. Russian supplies to Ukraine itself were suspended Jan. 1 pending a new contract.
European Commission President Jose Barroso “warmly” welcomed the accord today. “We now need the gas to flow immediately to the EU,” Barroso said in an e-mailed statement released jointly with EU Energy Commissioner Andris Piebalgs. They said the monitoring teams “will start to do their work as soon as possible.”
A group of 17 EU monitors arrived in Ukraine and a further five were on their way to Moscow, the European Commission said in an e-mailed statement. Two Commission officials were included in the team sent to each country, while the remaining members were experts supplied by European gas companies.
Monitoring Teams
In Ukraine the monitors were dividing into five teams, two of which would travel to the eastern border where the gas arrives near Sumy and Novopskov, two to the western border where it exits near Uzhhorod and one to a dispatching center to coordinate information.
Gazprom is ready to start work resuming gas shipments to European customers via Ukraine as soon as it has confirmation of the accord’s signature, Miller said in a statement yesterday. He said the company had planes waiting to fly experts to the pumping stations. It would first send minimum volumes needed, mainly to Balkan countries, and increase the amount quickly once it was sure Ukraine was not siphoning any fuel.
Once Russia resumes shipments, it will take 36 hours for the gas to start reaching European consumers. Supplies to at least 20 nations have been affected.
Gazprom’s European customers receive 80 percent of supplies through pipelines that cross Ukraine. The Russian exporter, which provides a quarter of Europe’s gas, said its overall deliveries to Europe were cut by about 60 percent on Jan. 7.
European Supplies
Bulgaria, Hungary and Slovakia were among eastern European countries that maintained curbs on gas use on Jan. 9. Most countries in western Europe have suffered less from the cutoff, tapping stockpiles and alternative supplies to meet demand.
Temperatures were forecast to fall as low as minus 11 degrees Celsius in Zagreb and minus 15 degrees Celsius in Sofia this weekend, according to AccuWeather.com.
NAK Naftogaz Ukrainy Chief Executive Officer Oleh Dubina returned to Kiev yesterday from Moscow after three days of talks on his country’s dispute with Russia on the price Russian wants to charge for 2009 gas deliveries to Ukraine.
“Russia offered us $450 per 1,000 cubic meters, a rate which doesn’t correspond to a European price, and a rate which we cannot accept,” Dubina said in a statement posted on the government’s web site. There is no plan for Dubina to return to Moscow and Naftogaz said “further talks should be conducted by top politicians.”
Ukraine paid Russia $179.50 per 1,000 cubic meters for gas last year.
Energy Alternatives
The dispute, over transit fees and debt as well as the gas price, has come as Ukraine’s leaders, Timoshenko and President Viktor Yushchenko, are facing a financial crisis that has forced them to seek a $16.4 billion International Monetary Fund bailout.
In 2006, Russia turned off all Ukrainian gas exports for three days, causing volumes to fall in the EU, and also cut shipments by 50 percent last March during a debt spat.
The Slovak government yesterday approved the restart of a nuclear reactor, in the face of opposition from the European Union, to meet the country’s energy needs as the halt in Russian gas supplies continued.
Prime Minister Robert Fico told reporters the move would be for a “necessary” period until the gas market stabilizes. The reactor in Jaslovske Bohunice was closed Dec. 31 as part of the conditions imposed on Slovakia when it joined the EU.
The Polish government will also decide next week on building nuclear power plants in Poland, according to Tomasz Misiak, a member of Poland’s ruling party Citizens’ Platform and chairman of Senate’s economy committee.
To contact the reporters on this story: Lucian Kim in Moscow on lkim3@bloomberg.net; Daryna Krasnolutska in Kiev on dkrasnolutsk@bloomberg.net
Posts
No comments:
Post a Comment