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Russia-Ukraine deal to restore gas to Europe

The prime ministers of Russia and Ukraine were expected to sign a deal today that would restore natural gas flow to shivering swaths of Europe, where factories have closed and customers have gone without heat while the two former Soviet allies bickered.

But it wasn’t clear when gas exports to Europe would resume. It could take at least a day for pressure to build in the pipelines and gas to reach Europe once the flow is restored. The European Union gets about a fifth of its gas from pipelines that cross Ukraine.

Some European leaders, dragged reluctantly into the tangle of commercial interests and diplomatic tensions that underpinned the gas dispute, reacted with muted skepticism Sunday. The stalemate has appeared on the brink of resolution at least once before, only to collapse into continued quarreling.

“Over the past few days, we have seen several similarly hopeful moments,” Martin Riman, trade minister of the Czech Republic, told the Associated Press. “The only thing that counts for the EU is the resumption of gas supplies.”

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The deal was brokered shortly before dawn Sunday after a 10-hour negotiation between Russian Prime Minister Vladimir V. Putin and Ukrainian Prime Minister Yulia Tymoshenko.

Russia’s state gas monopoly shut down all natural gas exports to Ukraine on New Year’s Day after negotiations broke down over the sale and transit of fuel. A few days later, Putin accused Ukraine of stealing gas headed to European customers on pipelines crossing Ukraine -- and ordered those gas shipments discontinued too.

Since then, both countries have failed to convince world opinion that the other was solely to blame for the fuel interruptions to Europe, and both will suffer uncounted loss of cash and clout because of the protracted crisis.

The theatrical weekend negotiations stake the reputation of the two leaders on the deal, particularly Tymoshenko’s. Putin is already seen as the ultimate authority in Russia, and any agreement signed by him is expected to stick.

Tymoshenko, a fiery spokeswoman for Ukraine’s 2004 Orange Revolution, is considered a front-runner in Ukraine’s presidential elections next year. Some Ukrainian analysts believe she has drawn closer to the Kremlin as she guns for the presidency -- a pragmatic move in a country where, despite the government’s pro-Western leanings, many people still feel profoundly connected to Russia.

Analysts have predicted that Moscow would work to build Tymoshenko’s image as a leader in the months before the elections. On Sunday night, a Russian government source was already feeding quotes to the Interfax news agency praising Tymoshenko’s management of the crisis.

“One should note that Tymoshenko, who is known as a tough negotiator who consistently protects her interests, made such a compromise which saved Ukraine’s image,” the source said. “It is not our affair, but it seems that this complies with Ukraine’s interests not only today but also in the long-term future.”

Tymoshenko was expected in Moscow today to attend a signing ceremony with Putin.

The new pricing plan has Ukraine paying 20% less than the European market price for gas this year, Putin announced. Smaller, poorer Ukraine has in recent years bought Russian gas at deeply discounted rates, a sticking point in this month’s negotiations.

Russia has said that the European market price for gas is $450 per 1,000 cubic meters. But with prices of gas expected to tumble this year, exact details of the deal cut by the two premiers remain murky.

Russia will avoid paying higher transit fees for gas being pumped through Ukraine en route to Europe, Putin said. Ukraine had pressed for an increase in the fees.

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megan.stack@latimes.com


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