Gas issues cannot be solved with Ukraine’s leadership divided – Putin

The disagreement between Ukraine’s President and Prime Minister hinders Kiev’s ability to negotiate disputed points in energy cooperation, says Russian Prime Minister Vladimir Putin.

Putin was speaking after a meeting with Ukrainian counterpart Yulia Timoshenko in the Kazakh capital Astana, where both take part in a summit of heads of governments of the members of the Commonwealth of Independent States.The two officials were discussing settlement of the problem of Ukraine’s underground gas reservoirs, which are to be filled with natural gas bought from Russia. Moscow is concerned that Ukraine may not be able to cover the bill in full, as it has already started to decrease gas imports.But delaying pumping it into the reservoirs is risky, because it may end in having no reserves when they are needed, namely when gas consumption rises in the winter. This may even affect Ukraine’s transit services and hurt delivery of Russian gas to Europe.Russia’s suggested solution is to pay fees due to Ukraine for the transit of gas to Europe over the next 5 years, Putin announced. The money will be used for buying Russian gas for Ukraine itself. The estimated cost of the gas needed is $4.7 to $4.8 billion.“It’s a great risk for Russia. I refer to the upcoming presidential election in Ukraine and everything dealing with the modernization of the gas pipeline system,” Putin pointed out.The scheme itself is not news, since Timoshenko announced it after her visit to Moscow in April. However, before Russia did not specify how much of the transit fee it is willing to pay Ukraine in advance.One strong opponent of the proposal is Ukraine’s President Victor Yushchenko, who believes Russia is trying to use the situation to have a hand in the assets of the Ukrainian gas monopoly Naftogaz, namely the gas pipelines.Commenting on his position, the Russian prime minister said: “We doubt that we can talk things over in this environment. We need a common position from Ukraine’s leadership. And even that does not mean we’ll be able to resolve all issues.”Putin said Russia can take part of the burden of helping Ukraine out, but only part of it, and called on the European Union to act too.“It’s still our common problem, because ensuring a normal supply of gas for Ukrainian domestic consumers is an important condition for ensuring gas supply to European consumers,” he pointed out, recalling the experience of the gas row in January 2009.The row started with Ukraine’s failure to pay for Russian gas, and resulted in the interruption of deliveries to European gas consumers for two weeks. Earlier, in January 2006 in a similar dispute, gas supplies were cut for four days.Putin’s words mirror a similar statement of President Medvedev, who told European leaders on Friday at the Russia-EU summit in Khabarovsk, that he doubted Ukraine’s ability to pay its gas debt.“Partners in such situations help their partners, and we are prepared to help Ukraine, but we would like to see the European Union, the countries interested in the stability and security of energy cooperation, to take part in the effort too.”Earlier on Thursday, news came from Russia’s Finance Ministry that Deputy Minister Dmitry Pankin said Russia was inclined to refuse a $5 billion credit, which Ukraine asked for in February 2009. He said however, that the decision was not final yet.