Published in The Moscow Times
By Anders Aslund

The great Russian-Ukrainian gas war is over, and it is time to assess the outcome. On the surface, the result looks promising. Finally, Russia and Ukraine have concluded a normal long-term gas agreement. Both gas prices and transit tariffs are market-related and based on clear principles without shady intermediaries or arbitrariness. The gas prices will probably average $230 per 1,000 cubic meters in 2009, while investment bankers had expected $250.

Prime Minister Vladimir Putin claimed that Ukraine had an obligation to guarantee transit of Russia's gas since Kiev ratified the Energy Charter Treaty (which Moscow has not ratified). Putin lamented that the "European Union is placing Russia and Ukraine in the same category," but the supplier in this transaction is also obligated to deliver. Vedomosti perhaps put it best: "Gazprom's reliability as a supplier is inseparable from Ukraine's as a transit state."

Corruption and Ukrainian domestic politics were major factors in a conflict in which the prime antagonists were Prime Minister Yulia Tymoshenko and Dmitry Firtash, partial owner of the shady intermediary RosUkrEnergo. Both Tymoshenko and Putin claim that RosUkrEnergo through Ukrainian President Viktor Yushchenko's administration disrupted the gas negotiations on Dec. 31.

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Published in Newsweek
By Anna Nemtsova

For nearly three weeks earlier this month, Russia and Ukraine were locked in a dispute over the price Kiev was to pay for Russian gas. As the two sides bickered, Russia shut off all gas supplies to Ukraine, while paying customers in Eastern Europe who depend on Gazprom's supplies had to endure freezing temperatures. Bulgaria declared a national emergency and vowed to reopen a Soviet-era nuclear power station to ensure its energy independence. Both sides called it a purely commercial dispute, but politicians in Kiev charge that the gas war has something to do with the Kremlin's dislike of Ukraine's pro-Western, pro-European Union president. The role of RosUkrEnergo, a gas trading company that has acted as a middleman, has also been attacked for allegedly giving kickbacks to top politicians on both sides. Russia switched the gas back on last week—but on Monday Kiev called for a new round of talks to decide future prices, raising the specter of renewed new gas warfare. NEWSWEEK's Anna Nemtsova spoke to Ukraine's deputy Prime Minister Hryhoriy Nemyria who, along with Prime Minister Yulia Tymoshenko, played a key role in resolving the dispute. Excerpts:

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Published by AFP

The United States said Thursday it "welcomes" the end to the gas dispute between Russia and Ukraine, and offered to help the European Union's efforts to enhance energy security.

"The United States welcomes the resolution of the gas dispute between Ukraine and Russia. We understand gas flows have been restored to European customers," said acting State Department spokesman Robert Wood.

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Published in Inform issue #100
See the full issue here.

Prime Minister Yulia Tymoshenko and her Russian counterpart Vladimir Putin, were present in Moscow to witness Gazprom and Naftohaz sign a ten year contract that brings an end to the gas dispute. Following signature of the contracts, instructions were given to resume gas flows to Europe.

The basis of the deal, agreed over the weekend, involves Ukraine paying 20 percent less than the European market price for gas in 2009. In return, the existing discounted tariff Gazprom pays for its gas to be transported through Ukraine’s pipeline system to Europe will remain in place until the end of the year. On 1 January 2010, both countries will then pay European market prices for gas supply and transit respectively.

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Government Press Service

NJSC Naftogaz of Ukraine and Gazprom Public Corporation have signed a long-term contract for 2009-2019 of the supplies of Russian natural gas to Ukraine and its transit to the European Union countries.

From Ukrainian side the contract was inked by Head of executive board of the NJSC Naftogaz of Ukraine Oleh Dubyna, from Russian side – Head of executive board of the Gazprom Public Corporation Oleksii Miller.

The deal was signed in the presence of Prime Minister of Ukraine Yulia Tymoshenko and Head of Government of the Russian Federation Volodymyr Putin.

Government Press Service

Today Prime Minister of Ukraine Yulia Tymoshenko had a telephone conversation with President of the European Commission Jose Manuel Barroso.

The interlocutors discussed issues on the delivery of gas from the Russian Federation for its transit to the European Union countries.

Jose Manuel Barroso expressed hope for the soonest signing of relevant contracts between the NJSC Naftogaz of Ukraine and Gazprom Public Corporation, in accordance with agreements achieved between Prime Minister of Ukraine Yulia Tymoshenko and Prime Minister of the Russian Federation Volodymyr Putin.

Published in Kyiv Post

Prime Minister of Bulgaria Sergei Stanishev has thanked Prime Minister Yulia Tymoshenko for the responsible and constructive position in the gas conflict with
Russia, the press service of the Vice Prime Minister for European integration Hryhorii Nemyria said this in the report.

On Monday, Nemyria, Stanishev and European Commission Commissioner Andris Piebalgs had a phone talk and discussed the natural gas supplies from Russia to the European countries.

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Published by iBYuT

On Saturday I am going to Moscow to try to reach an agreement with Russia on reliable transit of Russian gas to Europe and not least, the reliable supply of gas to Ukraine.

In the current circumstances, fulfillment of this task will be a significant challenge.

The top priority for the government today is to secure the resumption of Russian natural gas transit to Europe. It is essential, firstly because the image of Ukraine as a transit country is being undermined; and secondly, because there is a risk of physical damage to our gas transportation system if the gas flow is not resumed.

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Ahead of Yulia Tymoshenko’s Moscow Visit, President Loses Control over His Faction

Mykola Martynenko was elected to head the Our Ukraine-Peoples Self Defence (OU-PSD) faction. His deputies are: Oleksandr Tretiakov, Ruslan Kniazevych, Taras Stetskiv, and Borys Tarasiuk. All 5 are members of the new enlarged orange coalition of BYuT, OU-PSD and the Voodymyr Lytvyn bloc.

The new leadership of OU-PSD means the president has lost control completely over his faction. Martynenko said on January 16 that the 'faction would no longer be the property of the president'. 'The decisions of the faction would be decided directly by deputies', Marynenko said, a clear reference to past attempts by the presidential secretariat to dictate how the OU-PSD votes and operates.

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Published in Inform issue #99
See the full issue here.

Late last night, Prime Minister Yulia Tymoshenko called her Russian counterpart Vladimir Putin to discuss principles for solving the natural gas dispute. The leaders agreed that they will hold talks in Moscow on Saturday.

Ms Tymoshenko also sent a telegram to Mr Putin saying that Ukraine would guarantee full delivery of natural gas through its pipelines to Europe, less 8 percent which would be used for technical purposes. Ms Tymoshenko pledged that Ukraine would pay for the gas used for technical purposes immediately after a price for Russian natural gas for Ukraine had been agreed.

According to a statement from the Ukrainian government, the dialogue between the two premiers was described as “constructive” and “a positive sign for solving all the problems in the gas sphere.” Prime Minister Tymoshenko said that she thought it would be possible to find a compromise.

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Published in New Europe

When is the gas going to flow to Europe again?
Ukraine is doing everything that is possible for the gas to start to flow to the EU as soon as possible. But we need two to tango. First of all we need gas to come to Ukraine, so that we can transport this gas to the EU as we were always doing. Yesterday Ukraine made a very serious effort to facilitate and to speed up the process, signing with the European Commission an agreement. (see document below)

What is at risk, is the trust. We need confidence building measures to be taken quickly, and it was Prime Minister of Ukraine, Yulia Tymoshenko which suggested to European Commission President Jose Barroso to send as soon as possible EU monitors to the Ukrainian-Russian border to the metering stations to monitor the gas supply. This happened on the morning on the morning of the 7th of January, after we received this Orthodox Christmas gift from Gazprom, and the full stop of gas supply to the EU (after the stop of gas supply to Ukraine happened on the 1st).

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Published in FT

The European Union resumed efforts last night to secure the restoration of Russian gas shipments via Ukraine to the EU after hopes of an early settlement to the crisis faded, leaving millions of consumers facing a fifth day of shortages.

With the winter turning bitterly cold across much of Europe, the EU failed to secure backing from Moscow and Kiev for the deployment of international observers to monitor the pipeline. While both Ukraine and Russia have agreed to the monitoring plan in principle, they remained divided over details including the role of Russian monitors in Ukraine and possible Ukrainian monitors in Russia.

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Published in Eurasia Daily Monitor
By Roman Kupchinsky

How does Russia’s Gazprom set the price for the gas it sells its customers in the former Soviet republics and the EU? Few, if any, managers in Gazprom can answer this question with any measure of certainty. The formula for calculating this seemingly capricious price, if there is such a formula, remains a highly confidential “commercial secret” closely guarded by Gazprom and its customers. For years, opacity, secrecy, and backroom deals seem to have been the main factors used to establish the price for Russian gas.

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Published in Reuters

The heads of Russian gas firm Gazprom and Ukraine's Naftogaz are holding direct talks aimed at solving a dispute that has cut Russian gas supplies to Europe, Ukraine's Deputy Prime Minister Grygoriy Nemyria said on Thursday.

The talks are being held by Oleh Dubyna, head of Ukraine gas company Naftogaz and Alexei Miller, chief executive of Gazprom.

"Mr Dubyna and Mr Miller are currently talking to each other. That is a good sign," Nemyria told the European Parliament.

Published in Eurasia Daily Monitor
By Roman Kupchinsky

On the morning of January 1, OAO Gazprom, the Russian state-owned gas monopoly, in league with the Russian government, decreased the volume of gas shipped to Ukraine by 90 million cubic meters a day—the amount that Ukraine had contracted for in 2008. Gas shipments of 300 million cubic meters per day for European customers, shipped via the Ukrainian trunk pipeline, were not affected at first; but on January 2 Hungary, Bulgaria, and Poland began recording drops in pipeline pressure and slight disruptions in supply, while Romania reported a gas decrease of 30 to 40 percent.

In November 2008 Gazprom announced that it would stop gas deliveries to Ukraine on January 1, 2009, unless Kyiv settled all its accounts for gas delivered in 2008, including late payment penalties. Throughout December the two sides could not reach an agreement and did not sign a contract for 2009 gas deliveries. The issues dividing the two countries were discussed in closed negotiations but with both parties resorting at the same time to public statements and threats as a means of applying pressure on each other.

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Published in Inform issue #98
See the full issue here.

Ukraine’s state-owned gas company, Naftohaz Ukrainy, has denied Russian accusations that it is stealing gas. However, a presidential aide gave a stark warning on Saturday that gas supplies to Europe could be impacted in two weeks time unless the dispute is resolved. In the meantime, Yuriy Prodan, Ukraine’s Minister for Energy, has led a delegation to EU states to explain Ukraine’s position, while President Viktor Yushchenko and Prime Minister Yulia Tymoshenko have invited the European Union (EU) to mediate in the dispute with Gazprom.

The supply of natural gas from Russia to Ukraine was cut off at 0700 hours GMT on Thursday, 1 January, after talks collapsed over the alleged non-payment of a debt and failure to agree a gas price for 2009. The central issues concern a demand by Gazprom to pay an alleged debt of $2 billion. Naftohaz said that it had paid $1.5 billion to the Swiss intermediary company, RosUkrEnergo, that supplies Central Asian gas to Ukraine. But Gazprom is insisting on a further payment of $500 million for alleged late payment fees, the validity of which Naftohaz disputes and has stated its willingness to take to a court of arbitration.

The other major bone of contention is the failure to agree a gas price for 2009 and the fees Ukraine wants to charge for transporting Russian gas to Europe. About 80 percent of Russian gas exported to Europe is transported through Ukraine’s ageing gas pipeline network. Currently, Gazprom enjoys a cut-price transport fee which is three-times below the market rate. Gazprom pays Ukraine $1.70 to transport 1,000 cubic meters of gas per 100 kilometres (62 miles) and has insisted on keeping the price unchanged. In a joint letter to Gazprom, Ukraine’s president and premier pointed out that the current fee is inadequate to fund the maintenance of the pipeline network.

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