A KREMLIN conference on the gas crisis gripping Europe failed to produce an agreement to restore supplies of Russian natural gas via Ukraine yesterday.
After meeting European and Ukrainian officials, Russian President Dmitry Medvedev said Prime Minister Vladimir Putin and his Ukrainian counterpart would continue bilateral talks in an effort to end the dispute that has blocked shipments across
Ukraine in the hope that gas will begin flowing again within days.
"I'm certain that we will resolve the transit problem in the nearest future," Medvedev said after the meeting.
The gas cut-off has left homes in Europe without heat and forced factories to shut or slow production. Ukraine's pipeline network normally carries about 80% of the Russian gas that goes to Europe – about one-fifth of the gas Europe uses.
The EU has threatened to review its relations with Russia and Ukraine if the dispute is not resolved this weekend.
"What matters are results, and the results of this meeting were not satisfactory, because there was not an agreement," said EU spokesman Ferran Tarradellas. "We need an agreement."
He said the EU delegation was "encouraged by the discussions" because Russia and Ukraine were seeking solutions rather than just blaming each other.
The Kremlin had billed the meeting as a summit, but no EU head of state attended. The 27-nation bloc was represented by its energy commissioner Andris Piebalgs and Czech energy minister Martin Riman, whose country holds the rotating EU presidency.
"Talks between Russia and Ukraine are to go on and we expect them to lead to a resumption of gas deliveries," said Riman.
Before flying to Moscow for the talks, Ukrainian Prime Minister Yulia Tymoshenko said reaching a deal would be extremely difficult.
Putin, in Germany yesterday, reiterated accusations that Ukraine has stolen gas and is trying to use its control over pipelines to "blackmail" Russia into selling Ukraine gas at an unreasonably low price.
Putin has promoted a possible stopgap solution, enlisting European gas companies for a consortium that would pay for "technical gas" needed to get Ukraine's pipeline up and running and ensure deliveries.
Medvedev said that proposal was still on the table, but it was unclear whether Ukraine would agree. An aide to Ukrainian President Viktor Yushchenko, who refused to come to Russia for the conference, last week dismissed the idea as a Kremlin attempt to acquire control of Ukraine's pipeline network.
Another possibility, Medvedev said, would be a credit in a European bank that would be used to ensure Russia is paid.
Russia stopped shipping gas to Ukraine for domestic use on January 1 when the countries could not agree on a price. It then accused Ukraine of siphoning off gas bound for Europe and turned off the taps entirely on January 7.
Russia resumed piping a limited amount of gas towards Ukraine on Tuesday after both agreed to have EU monitors check flows, but the gas did not reach Europe. Russia says Ukraine is blocking shipments to European consumers, while Kiev says Russia wants to send gas along a route that would disrupt supplies to Ukrainian consumers.
A geopolitical struggle over Ukraine's future underlies the commercial dispute.
Russia and Ukraine have been at odds since the 2004 Orange Revolution brought Yushchenko to power. His push for Ukraine to join Nato and the EU has angered Moscow.
