Russia ready to partially buy Ukraine’s gas pipelines

Vladimir Putin says Russia is ready to take part in the privatisation of Ukraine's gas transport system, if Kiev agrees. The Russian Prime Minister was speaking as the energy dispute between the two countries continues.

Speaking in Germany, Putin said that Russia could “take part in the privatisation if Ukraine has such a wish”.

He also pointed out that Moscow had “proposed several years ago to rent the system, which would thus remain the property of the Ukrainian state.”

He added in the interview that the EU should lend Ukraine the cash to pay off its gas debts.

Despite an agreement between Russia, the EU and Ukraine over the monitoring of gas flows to Europe, supplies have not resumed. Russia says it has not received a document signed by Ukraine last night.

However, judging by what Ukraine’s Prime Minister Yulia Timoshenko said about some points of the document signed by Ukraine and the EU, that version contradicts the protocol agreed by Russia and the EU.

For the time being, Gazprom can rely only on her words because Gazprom says it hasn’t yet received a copy of the document signed by Ukraine, and this is holding up the resumption of gas transit to European consumers.

According to what Timoshenko has said, the protocol signed by Kiev states that Ukraine is a reliable transit partner and that it did not prevent supplies getting through to Europe.

It also says Ukraine was not siphoning off gas in the period from January 1 till January 7, and also that Kiev had fully paid its gas debt to Gazprom.

For its part, Gazprom says more than 86 million cubic metres of its gas intended for Europe have still not reached their destination. That is almost a quarter of Russia’s daily gas flow to Europe. Gazprom also says Kiev still owes it US$ 614 million for earlier gas deliveries, and that it has not received a copy of the document signed by the Ukraine “not even a facsimile one.”

The company also stressed the content of the protocol signed by Kiev should be absolutely identical to that signed by Moscow and earlier initialled by the Czech Republic.

Negotiations on a new contract between the two countries remain on hold.

However, there are international charters which say that, regardless of any dispute, transit countries are required to deliver gas.

“In the event of disputes, the transit country is bound to procure uninterrupted passage of energy resources regardless of the stake of the dispute, regardless of the time that it takes to be settled. Ukraine appears to be disregarding this,” said Konstantin Luzinyan-Rizhinashvili, international lawyer from DLA Piper.

Meanwhile, monitors are arriving at the assigned points to control the transit of Russian gas through Ukraine. Gazprom says it will resume a full gas supply to Europe only when the monitors confirm there has been no theft of gas. Gazprom’s condition is made in connection with the agreement reached by Ukraine, Russia and the EU, allowing international monitors to check the flow of gas through its territory.

Both Ukraine and Russia have been criticised by the European Union for letting the dispute go so far.

Europe has not received any gas from Russia since Moscow was forced to fully stop sending gas through Ukraine on January 7. Homes are unheated, schools and businesses closed and people are freezing because of the deadlock. Hundreds of thousands of Europeans have faced severe gas shortages, but Bulgaria, Slovenia, and Serbia are feeling the brunt, while Germany, also hit by the halt, has tapped into its reserves.