Russia and Ukraine ended a bitter, months-long dispute over gas
supply on Wednesday with a five-year deal hailed in both countries
but seen as a bittersweet outcome in Europe after a shudder from
supply shortfalls.
Russia's gas giant Gazprom and Ukraine's oil and gas company
Naftogaz Ukrainy clinched a deal on Wednesday, under which Gazprom
will sell gas for US$230 per 1,000 cubic meters to the Rosukrenergo
trading company, which will mix the Russian gas with cheaper gas
from Central Asia and sell the blend to Ukraine for US$95 1,000
cubic meters.
Ukraine had been buying Russian gas at US$50 per 1,000 cubic
meters over the past year.
The two sides also agreed on a new price for transit of gas
through Ukraine to Europe of US$1.60 for every 1,000 cubic meters
transported 100 km, up by nearly 50 percent from the previous price
of US$1.09.
Hours after the announcement of the deal, Russian President
Vladimir Putin hailed the accord, saying it will have a positive
impact on bilateral relations and "create stable conditions for
supply of Russia fuel to western European partners for many years
to come."
Putin's Ukrainian counterpart, Viktor Yushchenko, who had been
resisting strongly the Russian demand to more than quadruple the
price of gas for Ukraine, also welcomed the agreements.
"The Ukrainian economy is well prepared to operate in new market
conditions," Yushchenko's press service quoted him as saying.
"Ukraine is a reliable and stable partner both for the European
Union (EU) and the Russian Federation," he said.
Gazprom provides about half the gas consumed in the EU and 80
percent of that amount is sent through pipelines crossing
Ukraine.
"The agreements will provide additional security guarantees to
gas exports to Europe and serve as a sound foundation for further
cooperation between Russia and Ukraine in the gas sector based on
market principles," Gazprom chairman Alexei Miller told a press
conference in Moscow.??
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Europe's nerve touched
Russia cut off supply to Ukraine at the height of the bruising
dispute. European countries from Slovenia to Germany felt the pinch
of Russia's move as gas supplies fed by a key pipeline through
Ukraine dipped severely during what has been one of the coldest
weeks of the winter.
Supplies in many affected countries were restored after Gazprom
pumped extra gas into pipelines running through Ukraine.
While Russia is struggling to portray itself as a reliable gas
supplier to European countries after its move caused an uproar in
Europe, EU officials said the 25-nation bloc must learn
lessons.
After an emergency session on Wednesday in Brussels to discuss
energy security, EU officials said Russian gas remains the backbone
of the EU's energy supply but the 25-nation bloc should learn the
lesson of the gas dispute and examine other types of energy.
While the EU's dependence on Russia's energy might not change
for years, the EU should focus more on energy efficiency, renewable
energy and nuclear energy, said Martin Bartenstein, economic
minister of current EU president country Austria.
Wednesday's meeting which was originally planned to explore a
way out of the gas dispute but turned into a celebration gather-in
gas Russia and Ukraine cut a deal before EU officials convened.
(Xinhua News Agency January 5, 2006)
