Friday November 20, 2009

Ukraine PM pledges to fulfil gas transit deal

By Yuri Kulikov and Darya Korsunskaya

YALTA, Ukraine (Reuters) - Ukrainian Prime Minister Yulia Tymoshenko told Russia's Vladimir Putin on Thursday that Ukraine would scrupulously fulfil its obligations on the transit of Russian natural gas to Europe.

Ukrainian Prime Minister Timoshenko arrives for the finals of the 50th Eurovision song contest in the Ukrainian capital Kiev. Ukrainian Prime Minister Yulia Tymoshenko told Russia's Vladimir Putin on Thursday that Ukraine would scrupulously fulfil its obligations on the transit of Russian natural gas to Europe. (REUTERS/Gleb Garanich)

Speaking at the start of talks with Russia which the European Union hopes will avert any possible new conflict disrupting gas flows to the EU again, Tymoshenko told Putin: "We will very carefully and distinctly carry out our part in the transit of the gas."

Before the talks Putin had warned that Russia would cut gas deliveries again if Ukraine stopped paying on time, under an agreement worked out last January, or siphoned off transit gas.

The January agreement, which he brokered with Tymoshenko, ended a conflict over gas pricing which led to Russian gas flows to Europe via Ukraine being halted for two weeks in mid-winter.

Millions in southern Europe were left without heating.

Russian supplies across Ukraine provide Europe with a fifth of its gas and earlier this week an anxious EU agreed with Russia an "early warning" mechanism to shield Europe from potential energy supply cuts in the event of further cuts.

But relations between Russia and the pro-Western leadership of the former Soviet republic have slid further in the run-up to a presidential election on Jan. 17.

The gas deal has also become mired in infighting in Ukraine between Tymoshenko and President Viktor Yushchenko, her political rival.

Though Ukraine has so far settled all its bills on time, Tymoshenko has conceded that, given the dire state of the economy, meeting the monthly payments for gas is a struggle.

But she told Putin on Thursday: "Ukraine has paid and will pay on time."

Using warm words, that contrasted with a frosty exchange earlier in the day between Moscow and Kiev, Tymoshenko said the agreement she had brokered with Putin in January had represented a "breakthrough" in their energy cooperation.

MOSCOW SNUB

The Kremlin earlier snubbed Yushchenko who had called for a revision of the gas agreement. It accused Kiev of trying to blackmail Russia and Europe over energy supplies.

In an open letter to Russian President Dmitry Medvedev, published on his website, Yushchenko said: "Keeping the contracts unchanged ... will create potential threats specifically to the reliability of supplies of gas to Ukraine and its transit to other European states."

He believes the price accepted for Russian gas was too high while transit fees coming to Ukraine were pitched too low.

Tymoshenko herself says the 10-year supply contract agreed with Russia does not have to be revised and provides for stable supplies of gas in 2010.

Kremlin aide Sergei Prikhodko, speaking to journalists in Moscow, poured scorn on Yushchenko's plea to Medvedev.

Ridiculing Yushchenko and Tymoshenko for constantly squabbling, he said: "We are categorically against energy security in Europe becoming dependent on the personal ambitions of Ukrainian politicians.

"The attempt to intimidate Russia and Europe with forecasts of a crisis in the transit of gas -- this already looks something like political blackmail," he said.

Prikhodko said gas relations between the two countries had a solid juridical base. "Of course these are not set in stone and we are always open to negotiations with our Ukrainian partners," he said.

Medvedev last summer publicly wrote off relations with the pro-western Yushchenko, accusing him of pursuing anti-Russian policies.

(Additional reporting by Pavel Polityuk in Kiev and David Brunnstrom and Pete Harrison in Brussels, Moscow newsroom; Writing by Richard Balmforth; Editing by David Stamp)

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