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Medvedev says no gas to Ukraine until documents signed

RIA Novosti

09/01/2009 19:00 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."

Russia and Ukraine failed to agree on New Year's Eve on how to settle Kiev's gas debts or on a contract for 2009 deliveries. As a result, gas supplies from Russia to European consumers through Ukraine were reduced and then halted.

Gazprom earlier accused Ukraine of stealing more than 86 million cubic meters of gas since the start of the year, but Kiev denied the accusations saying that Russia was trying to discredit Ukraine as a reliable gas transit partner.

The situation has reawakened concerns in Europe about the reliability of Russia as an energy supplier.

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.

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