Russia, Ukraine Reach Gas Deal
MOSCOW—A compromise between Russia and Ukraine has curbed the risk of another serious cutoff of gas to Europe this winter, but financial problems and political tensions inside Ukraine still pose a threat, officials on both sides say.
Russian Prime Minister Vladimir Putin agreed with his Ukrainian counterpart, Yulia Tymoshenko, late Thursday to allow Ukraine to buy less gas than contracted next year, removing the risk of crippling fines for Kiev. In return, Ms. Tymoshenko promised there would be no disruptions in payment of gas or transit of the fuel to Russia's customers in Europe.
The deal is good news for Europe, but the situation could still be complicated by Ukraine's floundering economy as well as political rivalry ahead of January's presidential elections, Russian officials warn.
Should another gas dispute evolve, however, Europe stands much better prepared to weather it than in past years, as demand has weakened while Europe's storage facilities are full.
Last winter, a Russia-Ukraine dispute over natural gas payments led to a two-week disruption of Russia's gas supply to much of Europe during January, leaving many Eastern Europeans without heat amid freezing temperatures.
No details were given about the agreement reached Thursday, but Putin said the two countries' gas firms—Russia's OAO Gazprom and Ukraine's Naftogaz—will put that agreement in writing.
"You can't give a 100% guarantee, but this deal does significantly reduces the risk of a new gas conflict," a Naftogaz official said.
Mr. Putin has warned repeatedly in recent weeks that Ukraine could have trouble paying its gas bills to Moscow. He said Russia would again turn off the taps if it believed Ukraine was siphoning Russian gas from pipelines meant for export to other European customers.
Gas also is a hot political issue in Kiev, where Ms. Tymoshenko is running for the presidency in the January elections. Incumbent Viktor Yushchenko, far behind in the polls, has been harshly critical of her gas deals as overly favorable to Moscow.