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Europeans Still Waiting For Gas From Russia

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Europeans Still Waiting For Gas From Russia

Business

Europeans Still Waiting For Gas From Russia

Europeans Still Waiting For Gas From Russia

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Russia says it is pumping gas through pipes that run through Ukraine. If true, that would resolve Europe's energy crisis. Russia shut off gas to Ukraine because of a price dispute. Gas then stopped flowing through Ukraine to European nations that suffered a painful wintertime loss of energy supplies. After intense negotiations, E.U. officials brokered a deal to get some gas flowing. However, the gas is still not leaving Ukraine, which the Ukrainians blame on a technical problem.

STEVE INSKEEP, host:

NPR's business news starts with Russia restoring the flow of gas.

(Soundbite of music)

INSKEEP: Or so we're told. This is the story that underlines Russia's power as an energy exporter. Russia says it has started pumping gas again through the pipes that run through Ukraine. If that's true, it would resolve Europe's worst-ever energy crisis. Russia shut off gas to Ukraine because of a dispute over prices. Gas then stopped flowing through Ukraine to other European nations, which suffered a painful, wintertime loss of energy supplies. It affected thousands of people. It could have affected millions of people over time.

After intense negotiations, EU officials brokered a deal to get some gas flowing again. Yet we're told the gas is still not getting through Ukraine, which the Ukrainians blame now on what they describe as a technical problem.

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Russia Opens Tap, But Gas Dispute Continues

Russia and Ukraine disputed anew Tuesday over the flow of natural gas down a pipeline through both countries to Europe, with Moscow claiming it had begun sending gas and Ukraine saying the gas flow was manipulated to make it impossible to export.

In the middle were European Union officials desperate for natural gas. They criticized both nations for intransigence and said they could not determine who was at fault.

Russia's state-controlled gas monopoly Gazprom said it began pumping gas to Europe at 2 a.m. EST, ending a six-day cutoff, but four hours later Gazprom's Deputy Chairman Alexander Medvedev said Ukraine's pipeline system had failed to carry it on to Europe.

"Ukraine didn't open any export pipelines," he told reporters. "They just shut down the entry of the pipeline in the direction of the Balkans. We don't have the physical opportunity to pump the gas to European customers."

But Ukrainian energy adviser Bohdan Sokolovsky said Russia was trying to discredit his country by sending natural gas intended for Europe on a technically complex route that would require Ukraine to cut out domestic consumers before it could deliver gas to the Balkans.

Since last week, amid freezing temperatures, those nations have been dealing with vastly reduced supplies as a result of a dispute between Russia and Ukraine over gas prices. At least 11 people in Europe have frozen to death.

Underscoring political tensions behind the gas dispute, Medvedev accused Washington of encouraging Ukraine's defiance. "It looks like they are dancing under the music that is orchestrated not in Ukraine," he said Tuesday.

Russia supplies about a fourth of the EU's natural gas, 80 percent of it shipped through Ukraine. The gas cutoff has affected more than 15 countries, with Bosnia, Bulgaria, the Czech Republic, Hungary, Serbia and Slovakia among the worst hit. Sales of electric heaters have soared and thousands of businesses in eastern Europe have been forced to cut production or even shut down.

Russia stopped gas supplies to Ukraine Jan. 1 amid a contract dispute. It continued sending gas to Europe across the Ukrainian territory until Jan. 7, when it fully halted shipments over alleged Ukrainian theft.

Complicating the situation, EU spokesman Ferran Tarradellas Espuny said both nations had deprived EU monitors of full access to their natural-gas control rooms.

"Access to the dispatching rooms is essential to know what is actually happening," he said, adding it's "too early to draw such conclusions" on who's at fault.

European Commission President Jose Manuel Barroso called Russian Prime Minister Vladimir Putin to express "disappointment" over the lack of gas flow to Europe and Russia's failure to let monitors to the control room.

Barroso's aide said Putin promised to look into both matters. Putin's office said he told Barroso that Ukraine is to blame for the problem and he should call them.

Russia has accused Ukraine of stealing gas intended for Europe and only restarted supplies after an EU-led monitoring mission was deployed to gas metering and compressor stations across Ukrainian territory. Ukraine has denied the charges, claiming that Russia has not sent enough gas to pump the rest of it west to Europe.

The two nations are deeply at odds over who should pay for this so-called "technical gas" — gas Ukraine needs to power the compressors — and the amount of gas needed is substantial. Ukraine warned Tuesday it would have to use some gas from Russia for that purpose, but Russia said it would consider that theft.

Masha Lipman of the Carnegie Endowment's Moscow office said the dispute will push the EU toward finally "creating a European gas market" that would reduce Russia's clout as an energy supplier. The EU will also have to reconsider the options of nuclear and coal-fired plants, she said.

Russia will not send natural gas to Ukraine for domestic consumption until a deadlock is resolved over what Ukraine should pay for Russian gas in 2009 and what Russia should pay for using Ukraine's pipelines.

Ukraine last year paid $179.50 per 1,000 cubic meters of gas, and Yushchenko said Tuesday that Ukraine will pay no more than $210 in 2009. Russia wants Ukraine to pay market price for gas, about the $450 that European customers pay.

From NPR staff and wire reports

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