Russian gas ignites tensions

Russia claims Ukraine 'stole' some gas

By Gabriel Gatehouse BBC News, Kiev, Ukraine

For a few brief hours it looked like the crisis was over.

Moscow said it had restarted the flow of natural gas to Europe via Ukraine.

But before that gas could reach its freezing customers in eastern and south-eastern Europe, the deal appeared to be off again.

Gazprom, the Russian energy giant, says Ukraine is blocking the flow of gas, preventing it from crossing the country.

Ukraine counters that the pipeline route that Russia is using to send the gas makes it technically impossible to deliver.

The row continues.

Purely commercial?

Gazprom maintains the dispute is purely commercial; many in Ukraine see a political motive too. There is no shortage of conspiracy theories.

Some believe the Kremlin is using its vast energy wealth to punish the government in Kiev for its pro-Western stance on a range of issues - from its stated desire to join Nato, to its support for Georgia during the recent conflict.

Residents of some European countries have suffered during the gas cuts

Others believe Gazprom wants to strong-arm Kiev into relinquishing control of its pipeline network, thus strengthening its own grip on supply lines to Europe.

There are even those who believe that the row is an elaborate smoke-screen to disguise the fact that Russia may not be able to deliver the amount of gas it has promised.

All of these theories are dismissed in Moscow. They say it's perfectly simple: if you don't pay your bills, you get cut off.

The deal brokered by the European Union, which allows for international observers to monitor the flow of gas through Ukraine in exchange for the resumption of supplies, is an extremely fragile one.

Even if the gas does start flowing back into Europe, the agreement could yet unravel. To understand how, we need to look at how this crisis began.

Theft allegations

On New Year's Eve, Russia and Ukraine failed to reach an agreement on the price Kiev should pay Moscow for its gas in 2009.

So, on 1 January Russia stopped supplying Ukraine with gas for domestic consumption. Gas flows to Europe continued.

But then Gazprom accused the Ukrainians of siphoning off some of that gas for their own use - "stealing", they called it.

The Czech EU presidency negotiated with Ukrainian PM Yulia Tymoshenko

Kiev denied the allegation, but admitted it had used some of the gas for what it called "technical purposes": to power the pipeline network that transports Russian gas to Europe across its territory.

Why, they reasoned, should Ukraine use its own reserves to help Russia sell its gas further west?

Moscow argues that it pays Ukraine for the service, and that Kiev should deliver on the agreement.

But, the amount Russia pays Ukraine in transport fees has historically been directly linked to the amount Ukraine pays Russia for its gas.

Ukraine has always paid less than other European customers in return for giving Moscow favourable transport rates.

And this brings us back to New Year's Eve. The two countries have so far failed to strike a deal.

Closely monitoring

Ukrainian Prime Minister Yulia Tymoshenko said on Monday that her country would continue to take this "technical gas" from Europe's supply until a fresh agreement is signed. But those negotiations have stalled.

So, all eyes are now on the international monitors stationed on Ukraine's western border.

Vladimir Putin, the Russian Prime Minister, has warned that if they discover that the volume of gas exiting Ukraine is smaller than that entering from Russia, Moscow will again reduce the flow.

For the European Union then, it is vital that Russia and Ukraine reach a longer-term agreement on the issue of gas prices.

The Ukrainian government has said it hopes the EU will participate in negotiations.

But Brussels may be reluctant to get involved in what is an ongoing and increasingly bitter dispute, one that blurs the boundaries between business and politics.

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