Putin Says Gas Consortium Deal in Sight

APGerman Chancellor Angela Merkel, left, and Prime Minister Vladimir Putin holding a news conference after their talks at the Chancellery in Berlin on Friday.
Prime Minister Vladimir Putin said Friday that he believed a deal could be reached soon with European firms to restart gas supplies to Europe cut off in mid-winter over a pricing dispute between Russia and Ukraine.

Putin, on a visit to Germany for talks with Chancellor Angela Merkel on the gas crisis, was speaking at the start of a meeting in Berlin with European gas firms seeking to help restore gas deliveries to the continent.
The consortium would provide gas necessary for technical reasons to get pipelines and pumping stations working again after European supplies were hit at the start of the year.

"We propose to share risks and create something like a consortium, invest money in it and supply the technical gas. I think this can be done reasonably fast," Putin said.

Russian energy giant Gazprom had earlier outlined the deal to supply gas that Ukraine's state energy company says it needs pumped into its pipeline system to restore pressure.

"We will sell this gas at the prevailing market price. The price will be around $450 [per 1,000 cubic meters]," Gazprom deputy CEO Alexander Medvedev told a conference call.

According to Reuters calculations, this and Ukrainian data on the gas needed would mean the European consortium would pay $162 million for January and $270 million for each of February and March.
Putin's forecast of a deal came as the European Union piled pressure on Russia and Ukraine to resolve their dispute.

Putin is to meet Ukrainian Prime Minister Yulia Tymoshenko in Moscow on Saturday on the gas price dispute and the EU Commission said such meetings provided a "last chance.”

"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."

Paolo Scaroni, chief executive of Italian energy giant Eni who was present at the Berlin meeting, said he intended to agree on concrete proposals to solve the gas dispute within hours.

Eni is Europe's leading gas operator and largest user of the Ukraine pipeline. Other European firms involved included France's GDF Suez and Germany's E.ON Ruhrgas.

The supply of gas to restore pressure in Ukrainian pipelines could allow gas supplies to Europe to get under way immediately, leaving the question of reimbursement for the consortium's gas on hold until an agreement between Ukraine and Russia on their price dispute is reached.

Putin and Tymoshenko's Moscow talks on Saturday 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 President Dmitry Medvedev. But the EU executive said it and the Czechs — current 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.

"It is clear today, even if they turn on the taps tonight and gas starts to flow, there has been irreparable, irreversible damage done, a loss of confidence in both Russia and Ukraine," said Martin Riman, Czech industry and trade minister.

An EU-brokered deal was supposed to get supplies of Russian gas moving to Europe via Ukraine on Tuesday despite the pricing dispute. EU monitors are in place to ensure Ukraine does not siphon off gas, as Moscow has alleged it has done.

Brussels is concerned the meeting proposed by Medvedev in Moscow could be an attempt to divide the bloc, which has so far been relatively united on the issue.

The European Union imports a quarter of its gas from Russia and 80 percent of its supplies go via Ukraine. The crisis has highlighted its vulnerability to disruption and sparked a new debate about diversifying supplies.
The row takes place against a backdrop of strained political ties between Moscow and Kiev. Russia is angered by the ambition of Ukraine's leaders to join the NATO alliance, and by their support of Tbilisi during the Russian-Georgian war in August.

Moscow is seeking a sharp rise in the prices Ukraine pays for its own gas supplies. Ukraine is reeling from a severe economic downturn, with output in the key steel sector falling 43 percent in December compared with December 2007.