Russia to resume gas exports

Russia turns the gas tap on again today, after a two-week dispute with Ukraine which has hit energy supplies to a dozen EU countries in the midst of a winter freeze.

Barring last-minute hitches, EU-bound gas will start flowing at 8am Central European Time, with the worst-hit countries – including Bulgaria and Slovakia which lost virtually all of their gas – the first beneficiaries.

However, Russia’s state-controlled gas company Gazprom says it will take up to 36 hours for the pipeline service to get back to normal.

The deal to end the dispute involves EU-lead gas experts monitoring flows at five gas metering locations in Russia, as well as locations in Ukraine and EU countries, particularly in Slovakia and Romania.

The expert teams were in place early today, fulfilling the “terms of reference” signed by Moscow and Kiev yesterday after five days of talks.

Russia turned off the gas tap to Ukraine on January 1, accusing Kiev of failing to pay its bills.

Russia then claimed Ukraine was siphoning off Europe’s supplies to offset its own shortfall. About 80% of Russian gas destined for EU customers goes via Ukraine.

The monitors’ job is to ensure that all Russian supplies destined for the EU get through from today, and are not diverted at the Ukrainian transit points.

A similar dispute between Russia and Ukraine three years ago also interrupted EU gas deliveries and triggered EU talks on how to step up Europe’s energy supply security.

Yesterday EU energy ministers considered the problem again at talks in Brussels, concluding that Europe needs to step up its gas reserves, cooperate more closely in any future shortages to share back-up supplies, and establish more supply routes to reduce the impact of a shutdown of one source.

A report is being drawn up the European Commission and will be discussed by EU leaders at a summit in March.

Gazprom made clear yesterday that the company agreed with the EU about the importance of the diversification of the gas routes supplying Europe.

Gazprom’s deputy head Alexander Medvedev also backed the creation of a permanent international gas monitoring group and described as “very important” the setting up of gas storage facilities to boost European energy security.

He said Gazprom was now working on developing such facilities in Austria, France, Germany, the UK and Belgium.

But top priority was to get services flowing again to Russia’s EU customers from this morning “if no further problems occur”.

Even if the gas flows smoothly again from today, Russia and Ukraine still have to solve the underlining cause of the crisis – the dispute over alleged unpaid bills and Russian gas price hikes.

Prime Minister Vladimir Putin’s spokesman Dmitry Peskov said that was a matter between Moscow and Kiev, and required no further EU-level mediation.