SOCHI, January 9 (RIA Novosti) - Russian President Dmitry Medvedev instructed the Russian energy giant Gazprom on Friday that gas supplies to Ukraine should be resumed only after the necessary documents are signed.

"Of course we are interested in gas transit resumption as soon as possible. But nevertheless I would like you to be guided by my instruction in solving this task: all these actions could be performed only after the documents are signed," Medvedev said at a meeting with Gazprom CEO Alexei Miller.

"We will never stop the theft by any other means," the Russian president added. "Unfortunately, [we] have no more trust in the Ukrainian side."

Miller said a document formalizing the mechanism to guarantee Russian gas transit through Ukraine could be signed on Friday, and then the Russian gas supplies would resume.

"We hope that a protocol on establishing an international independent mechanism to ensure transit of Russian gas via Ukraine will be signed today, and we will resume deliveries almost at once," Alexei Miller said.

The European Commission's energy spokesman Ferran Tarradellas Espuny said however Ukraine will be able to ensure gas transit to Europe in 36 hours after Russia resumes gas supplies. He said that Russia could start delivering gas in 13 hours and the Russian gas would reach the EU member states in at least three days.

Medvedev also said Russia should give no preferences to Ukraine regarding gas prices. "If there is a price, it should be normal, balanced and European, including for Ukraine, without any discounts or preferences. Ukrainians should pay as much as Europeans do," he said.

Gazprom earlier offered Ukraine a price of $250 per 1,000 cu m for gas in 2009, about half the current average price in Europe. Ukraine, which paid $179.5 last year, said it was prepared to pay $200-235 per 1,000 cu m. After the refusal, Gazprom said the price could be $418.

The Russian prime minister said Thursday Russia is ready to pay a market price for gas transit via Ukraine if Kiev pays a market price for supplies of Russian gas.

"We believe Ukraine should pay a market price, and we are ready to pay a market transit," Vladimir Putin told foreign journalists.

"The market transit [rate] in Europe is $3.4 for 1,000 cu m per 100 km," Putin said.

Russia paid $1.6 for 1,000 cu m per 100 km in 2008 in line with a contract valid until the end of 2010. In response to a claim by Ukraine's energy ministry, the Kiev economic court ruled earlier that Ukrainian energy company Naftogaz could not pump Russian gas westwards at a price of $1.6 for 1,000 cubic meters per 100 kilometers.

Medvedev also said Friday Ukraine had sold gas to its domestic consumers at an overstated price.

"Last year, when we supplied gas to Ukrainian consumers at $179.5 [per 1,000 cu m], the Ukrainian consumers received the same gas at a price of $320 per 1,000 cu m," Medvedev said.

"And this entire margin accumulated in the pockets of structures we do not know, which, in all likelihood, express someone's corruption-related interests. And funds received from these deals were most probably used to achieve political goals or resolve personal problems," he said.

Russia backs off deal with Ukraine

MOSCOW, Russia (CNN) -- Just as millions of Europeans struggling through cold winter temperatures thought a resolution had been reached in the Russia-Ukraine natural gas standoff, Russia said it will not proceed on a deal.

Russian President Dmitry Medvedev told his government Sunday not to follow the agreement, saying the Ukrainian side made modifications not discussed with Russia. Russia believes those changes distort the essence of the agreement brokered by the European Union.

In a statement carried on Russian state-run TV, Medvedev complained about two clauses that Ukraine had added to the document. "These clauses and annexes are a mockery of common sense and an offense against the agreements that were reached earlier," he said.

CNN was attempting to reach Ukrainian officials for comment.

With millions in the region struggling through cold winter temperatures, pressure for a resolution has increased every day.

Czech Prime Minister Mirek Topolanek, whose country holds the rotating European Union presidency, had traveled to the region to broker a deal. Ukraine signed it early Sunday.

Earlier, both sides had said they have taken steps to resume flow. Ukraine's state-run gas company Naftogaz told CNN it has dispatched a team of independent investigators to monitor the flow of gas.

Russia's national gas supplier, Gazprom, said its monitors were standing by, awaiting verification that Ukraine had signed the protocol that set up a mechanism to control the transmission.

Gazprom said it would turn the gas back on once all parties were in place.

The monitors were needed to ensure that Russian gas continues to flow through Ukraine, as it should under international transit agreements.

Both Naftogaz and Gazprom accused the other of shutting off the supply, and monitors would help stop any more potential finger-pointing.

The gas supply was cut off this week amid an ongoing dispute between the two gas suppliers over unpaid bills and the price of a new contract.


Gazprom shut off Ukraine's domestic supply of gas January 1 and on January 7 shut off all of its gas transit to Europe, accusing Ukraine of illegally siphoning off those gas exports.

About a quarter of Europe's gas supplies come from Gazprom. The shutoff left millions of European customers at risk of gas shortages amid freezing winter temperatures.

Russia's Gazprom restarts pumping gas to Europe via Ukraine after 6-day cutoff

By VLADIMIR ISACHENKOV , Associated Press

MOSCOW - Russia's state gas monopoly resumed pumping supplies to Europe via Ukraine Tuesday after a six-day cutoff that left large parts of Europe cold and dark.

Gazprom turned on the taps after 10 a.m. Moscow times (0700 GMT), Gazprom spokesman Boris Sapozhnikov said by telephone from Sudzha gas metering station on the border with Ukraine.

European Union officials said it would take at least a day for gas to reach consumers in Europe after gas was first pumped into Ukraine.

Russia has accused Ukraine of stealing gas intended for Europe and only restarted supplies after a EU-led monitoring mission was deployed to gas metering and compressor stations across Ukrainian territory. The observer mission includes EU, Russian and Ukrainian officials and representatives of European energy companies.

Ukraine fiercely denied the siphoning charge, but Prime Minister Yulia Tymoshenko warned Monday Ukraine will have to use some gas from Russia as so-called "technical gas" to power compressors that push Europe-bound gas through its 23,000 miles (37,800 kilometers) of pipelines.

Gazprom has insisted it's Ukraine's duty to provide the gas, setting the stage for more bickering and possible supply interruptions.

Ukraine's position potentially "creates a crisis situation with the transit of Russian gas to European users," Gazprom spokesman Sergei Kupriyanov said.

He warned Tuesday that "the amount of Russian gas pumped into Ukraine's pipeline network must strictly correspond to the amount of gas flowing out of Ukraine."

Valentyn Zemlyansky, the spokesman for Ukraine's state oil company, Naftogaz, said Ukraine will continue to use some of the Europe-bound gas as fuel for its pumping stations and denounced Gazprom's demands as an "attempt to put pressure on Ukraine."

"Where else will we take those volumes (of gas) from?" Zemlyansky said.

Russia's President Dmitry Medvedev already has ordered Gazprom to reduce supplies if it again sees Ukraine siphoning gas, and suspend it completely if it believes Ukraine continuously steals gas.

Russia supplies about one-quarter of the EU's natural gas, 80 percent of it shipped through Ukraine, and the disruption came as the continent was gripped by freezing temperatures in which at least 11 people have frozen to death.

The gas cutoff has affected more than 15 countries, with Bosnia, Bulgaria, the Czech Republic, Hungary, Serbia and Slovakia among the worst hit. Sales of electric heaters have soared and thousands of businesses in eastern Europe have been forced to cut production or even shut down.

Russia stopped gas supplies to Ukraine on Jan. 1 amid a contract dispute, but continued sending gas to Europe across the Ukrainian territory until Jan. 7 when it fully halted shipments over alleged Ukrainian theft.

Russia used the gas dispute to reaffirm its push for prospective gas pipelines under the Baltic and the Black Sea which would bypass Ukraine. But EU officials said the crisis should encourage a search for independent energy sources and supply routes, such as the U.S.-backed Nabucco pipeline that would carry Caspian energy resources circumventing Russia.

While the current gas crisis was triggered by a pricing dispute, relations between the two ex-Soviet neighbors have been strained since the 2004 Orange Revolution in Ukraine led to the election of a pro-Western government in Kiev.

Ukraine's efforts to join NATO and its support for the former Soviet republic of Georgia in its war with Russia in August has angered the Kremlin. Last week, U.S. officials had warned Russia not to use its energy resources as a weapon against Europe.

Russia still will not send natural gas to Ukraine for domestic consumption. The neighbors remained deadlocked over the price Ukraine should pay for gas in 2009 and the amount Russia should pay for transporting gas through Ukraine.

Ukraine in 2008 paid $179.50 per 1,000 cubic meters of Russian gas and turned down Gazprom's proposal of $250 for 2009 — a substantial hike for the economically distressed country but still far below some $450 that European customers pay.

The latest round of price talks ended Sunday without result.

Russia, Ukraine PMs reach gas deal
Prime Ministers Putin, Tymoshenko say agreement reached on gas prices

by Oleg Shchedrov, Reuters

MOSCOW - The prime ministers of Ukraine and Russia said on Sunday they had reached an outline deal to restore gas supplies to European consumers after marathon talks which dragged on into the small hours of the morning.
"Gas transit, the Ukrainian side assured us, will be restored very soon," Russian state channel Vesti-24 showed Russian Prime Minister Vladimir Putin saying in a brief statement after the drawn-out talks.
Putin, standing next to his Ukrainian counterpart Yulia Tymoshenko, said Moscow had agreed to make a 20-percent discount for Kiev from a price European consumers pay, "on condition Kiev keeps preferential tariffs for Russian gas transit to Europe across Ukraine in 2009 at last year's level".

"We also agreed that starting Jan. 1, 2010 we will fully move to gas prices and transit tariffs in line with European levels without any reductions and discounts," Putin said.
Tymoshenko said: "We ordered the heads of Naftogaz and Gazprom to prepare by Monday the whole package of documents and formulate them the way it was agreed during today's talks."
"Once all the documents on gas transit and gas purchases have been signed, gas transit to Europe will be fully restored."
Gazprom spokesman Sergei Kupriyanov told local channels Russia's gas export monopoly and Ukraine's Naftogaz "are now drawing up an agreement on gas supplies to Ukrainian consumers and gas transits". Naftogaz offered no comment.
Putin and Tymoshenko were under intense pressure from the European Union to resolve the dispute, which has cut gas supplies to much of eastern Europe since Jan. 7 and damaged both countries' reputations as reliable energy partners.
While Putin, Russia's paramount leader, had full authority to seal an agreement, it remained unclear whether Tymoshenko's domestic political rival Viktor Yushchenko would respect the deal reached in Moscow.
Last October, Tymoshenko and Putin clinched a deal calling for a three-year transition period after which Ukraine would pay market prices.
President Yushchenko had no objections to that deal and said repeatedly Ukraine must be prepared to pay market prices, while saying a formula had to be found to determine the price.
Yushchenko and Tymoshenko had disagreed on some negotiating tactics in the final run-up to the deal, notably on whether a deal for Ukraine and transit to Europe should be separate.
The frantic all-night talks followed a summit in Moscow of gas-consuming nations at the Kremlin on Saturday afternoon which failed to resolve the dispute.
Russia cut off supplies to Ukraine on Jan. 1 because it would not pay higher prices for its gas. Six days later, export flows to eastern Europe through Ukraine ceased amid Russian accusations that Kiev was "stealing" gas intended for export.
After the Kremlin meeting, Medvedev reiterated Moscow's position on the issue at the heart of the dispute, saying that Kiev had to pay European prices for gas supplies, more than double current levels.
"There is nothing damaging about that. It's the money our other partners pay and Ukraine is in a position to pay it," Medvedev told a news conference.
Kiev, whose crisis-gripped economy is forecast to contract by up to 5 percent this year, says it cannot afford such high prices and wants Russia to pay higher transit fees for gas it exports through Ukraine.

MANDATE
Russian officials had earlier questioned if Tymoshenko, a former gas trader, had the necessary mandate to discuss a solution.
In Kiev, a source in Yushchenko's office said there were no divergences between the president and the prime minister. "The prime minister has a full mandate at the talks. Otherwise, she would not be taking part in them," the source said.
Russia invited heads of government of all countries buying or transporting its gas to its "Moscow International Conference on Ensuring Delivery of Russian Gas Supplies" on Saturday, but most stayed away.
The Czech Republic urged EU member states not to attend so that Brussels could speak with one voice. Slovakia was the only EU member to come, apart from the Czechs. Most other attendees were Russia's allies in the Balkans and eastern Europe.
A key hurdle to ending the dispute appeared to have been overcome when a consortium of European gas companies said they had agreed to supply enough gas to fill the empty pipeline and restore pressure so that exports could resume.
But the key sticking point remained the price Ukraine must pay for its own supplies this year. Yushchenko insisted there could be no question of exports resuming to Europe until Ukraine had settled its own prices with Moscow.
Gazprom wanted Ukraine to pay European-level prices of $450 per 1,000 cubic metres (tcm) of gas for 2009, up from $179.5 per tcm in 2008. But Ukraine, heading into its worst recession for a decade, had said it can afford only $201.
The row has focused minds in Europe about the need to find new routes for gas but experts say any solution would take years to build and Gazprom says EU dependency on Russian gas is forecast to increase over the coming years.