Russia – Ukraine Gas Deadlock Over

The high pitched deadlock between Russia and Ukraine over the export of gas comes to an end with the signing of the agreement between the two countries.

The Chief Executive Officer of Gazprom, Alexie Miller and Deputy Prime Minister of Russia, Igor Sechin attended the EU meeting in Brussels where an agreement has been signed to restart the flow of the gas. Ukraine has accepted all the terms of Russia to restore the gas supply. Earlier, OAO Gazprom, the chief gas exporter of Russia snipped off the gas supply to Ukraine on January 7, 2009 over the non-payment of debts by the latter and siphoning off the gas destined for other nations. The supply of gas to more than 80 percent customers of Russia is through Ukraine. In turn more than 20 EU countries had been facing the shortage of gas since the day of call-off.

Russia is a major gas resource for all the EU countries and with the disruption of supply to Ukraine all the other countries have been hardly hit especially the Balkans where the Russian gas agency is the only source of supply.

According to a spokesman of Gazprom, Ukraine owed it a debt of around $2 bn as on January 1, 2009, a claim denied by Ukraine. According to the company spokesman, Ukraine is paying $179.50 per thousand cubic meters which is far below the price ($500), paid by other customers of Gazprom for the same amount of gas. The Russian experts will keep a tab on the amount of the gas flowing into Ukraine and will monitor its transit. Other EU nations such as Czech, Italy and Hungary will also do the independent study of the gas data through the nation. Once the gas flow starts from Russia, it will take another 36 hours to reach the EU nations.