Moscow, Kiev strike gas deal, no New Year's Eve gas crisis due.

MOSCOW, November 21 (By Itar-Tass World Service writer Lyudmila
Alexandrova) -- Consumers of natural gas in Europe may heave a sigh of
relief. No re-run of the customary Christmas time and New Year's Eve gas
rows between Russia and Ukraine is due. This is the main outcome of
Thursday talks between the two countries' prime ministers in the Crimean
seaside resort of Yalta, where Moscow agreed to meet some of Kiev's
requests.
As a matter of fact, both parties disavowed the threats contained in
the Ukrainian president's open message to his Russian counterpart that
made headline news the day before.
Russia decided it would be possible to meet Ukraine halfway and to
adjust the earlier concluded gas agreements in the context of the ongoing
crisis, Prime Minister Vladimir Putin said after talks with his Ukrainian
counterpart Yulia Timoshenko.
"We shall see in the New Year without any problems," he said, clearly
making an allusion to Russian-Ukrainian gas quarrels that repeatedly
erupted over the past several years either on New Year's Eve or in the
first days of January.
Moscow has agreed to compromise. Putin promised not to fine Ukraine
for importing less gas than it is expected to under the effective
contract, and Timoshenko vowed Ukraine would honor its duty to transit
Russian gas to Europe with diligence and precision.
It was agreed that Gazprom and Naftogaz would renegotiate the amounts
of gas to be supplied. Future gas agreements will be adjusted in line with
Kiev's interests.
Ukraine asked Russia to reduce the contracted amount of gas in 2010 by
35 percent, from 52 billion cubic meters to 33.75 billion cubic meters,
because industrial production has slumped.
"This decision is acceptable for all," Putin said.
The Russian prime minister declared that fines for the
under-consumption of contracted amounts of gas were standard world
practice, but such sanctions would not be applied in this particular case
"in view of the special relationship between Russia and Ukraine."
Ukraine in 2010 will be paying the market price of gas, and Gazprom,
the full transit fee without any discounts. For Ukraine, Timoshenko said,
this will yield multi-billion dollar revenues.
This year Ukraine has left the transit fees unchanged, and Russia
agreed to sell gas at a 20-percent discount - as compared with the
European prices.
"Next year there will be no discounts, but there will also be no
preferential transit fees," Putin said. The transit tariffs will go up
approximately by 60 percent.
Also, Putin made another statement of special importance in the
context of the forthcoming presidential election in Ukraine, due in
January. He said he had found it comfortable to work with the Timoshenko
Cabinet. He acknowledged, though, that the negotiations with it were
tough-going for the whole year.
"But we have invariably managed to come to terms. Despite all the
problems that we had all these obligations are honored," he said.
Russia provides about a quarter of the amount of gas Europe consumes a
year. About 80 percent of the gas traffic from Russia to Europe is through
Ukraine.
"Ukraine pays on time and it will keep doing so in the future. We
shall execute our function of transiting Russian gas with great precision
and accuracy," Timoshenko said.
Apparently, Timoshenko's position is in stark contrast to that of
Ukraine's president, says the on-line periodical daily Vzglyad. The day
before Viktor Yushchenko addressed Russian president Dmitry Medvedev with
an open letter, in which he pointed to what he described as an obvious
risk of abuse of the existing agreements.
Yushchenko claimed that if contracts were left unchanged, next spring
there might emerge potential threats to the reliability of gas supplies to
Ukraine and its transit to other countries in Europe.
The Kremlin branded Yushchenko's statements as "political blackmail."
"We are strongly against making Europe's energy security dependent on
the personal ambitions of Ukrainian politicians. And the attempt to scare
Russia and Europe with predictions of a gas transit crisis smacks of
political blackmail," said Russian presidential aide Sergei Prikhodko.
"The publication of the message at a time when Ukrainian prime
minister is saying she sees no problems in relations with Russia over gas
makes one suspect it is addressed mostly to domestic audiences," he said.
Senior analyst at the investment company Metropol, Alexander Nazarov,
is quoted by the daily Gazeta as saying the Ukrainian president's message
has no bearing on the economy or gas contract problems.
"The motivation is simple - the presidential election. The gas issue
for the Ukrainian economy is a most fundamental one. The one who appears
in the guise of 'the savior of the nation' will gain a major competitive
edge in the presidential race," Nazarov said.
"Yushchenko is interested not so much in having the contract revised,
as in discrediting Timoshenko and shutting the gas valve. Then he will
easily accuse Russia of aggression," agrees the general director of the
National Energy Security Fund, Konstantin Simonov.

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