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Putin believes gas solution is close

Source: Agencies | January 17, 2009, Saturday | Print Edition

THE European Union piled pressure on Russia and Ukraine yesterday to resolve dispute that has cut gas supplies to Europe in mid-winter and Germany said Russia must honor energy contracts.

Russian Prime Minister Vladimir Putin, who began a visit to Germany yesterday, is to meet Ukrainian Prime Minister Yulia Tymoshenko in Moscow today on the gas price dispute and the EU Commission said such meetings provided a "last chance."

But Putin said yesterday he believed a deal was possible "reasonably fast" on a consortium of European gas firms which could provide gas to Ukraine and get pipelines to Europe working again.

"We propose to share risks and create something like a consortium, invest money in it and supply the gas. I think this can be done reasonably fast," Putin said at the start of a meeting with European gas firms in Berlin.

"The European Commission believes that the meetings in coming days offer the last and best chance for Russia and Ukraine to demonstrate they are serious about resolving this dispute," Commission spokesman Johannes Laitenberger said.

"The gas must flow. We will regard this period as a test case for judging whether or not they are credible partners."

German Chancellor Angela Merkel was to tell Putin yesterday that Russia and Ukraine must respect contractual obligations in their row over gas, a German government spokesman said.

Meanwhile, European energy firms were working on a plan to restore gas supplies to Europe hit since the start of the year. Paolo Scaroni, chief executive of Italian energy giant Eni SpA said on Thursday that a consortium would provide the gas needed to get pipelines and pumping stations work again.

The move could allow gas supplies to Europe to get under way immediately, leaving the question of reimbursement for the consortium's gas on hold.

Scaroni said the consortium would include Germany's E.ON, Gaz de France Suez and an Austrian company. Eni is Europe's leading gas operator and largest user of the Ukraine pipeline.

Putin and Tymoshenko's Moscow talks today aim to resolve the gas row, which has cut supplies to 18 states, forced many factories to close and left householders shivering.

There was little enthusiasm in Brussels for a separate Moscow meeting with importers proposed by Russian President Dmitry Medvedev. But the EU executive said it and the Czechs -- holders of the EU presidency -- would attend if Russian and Ukrainian leaders were there too.

Frustration is growing in the EU at the failure of Russia and the former Soviet republic of Ukraine to resolve the row over how much Kiev should pay Moscow for gas, or at least allow gas to flow to Europe while they argue it out.
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