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Putin Says Moscow Nearing Deal To Supply Gas

A valve and pressure gauge at a compressor station in the Ukrainian village of Boyarka.
BERLIN (Reuters) -- Russian Prime Minister Vladimir Putin has said that Moscow is nearing a deal to deliver gas to European customers after a contract dispute with Ukraine that has cut supplies since the start of the year.

"We are approaching interesting agreements which could lead to a solution," Putin said in Berlin at a joint news briefing with German Chancellor Angela Merkel.

He was referring to a deal with a consortium of European energy companies to provide "technical gas," which is needed to pump supplies through the Ukrainian pipeline network.

A bitter gas pricing dispute between Russia and Ukraine, disrupting transit gas supplies, has raised questions in the West about Europe's heavy reliance on Russian gas.

"We approached our main Western partners -- E.ON Ruhrgas, Gaz de France, ENI, and our Austrian partner -- with a request to share the risk of supplying technical gas to Ukraine," Putin said. "In the course of discussions yesterday and today, I have understood that our partners agree with this proposal."

Putin also said it was intolerable that Russia be expected to supply the technical gas at its own expense when it was not to blame for the supply disruptions.

'Prevailing Price'

Putin, on a visit to Germany for talks with Chancellor Angela Merkel on the gas crisis, was also meeting European gas firms seeking to help restore gas deliveries to the continent.

Russian energy giant Gazprom had earlier outlined the deal to supply gas that Ukraine's state energy company says it needs pumped into its pipeline system to restore pressure.

"We will sell this gas at the prevailing market price. The price will be around $450 (per 1,000 cubic meters)," Gazprom Deputy Chief Executive Aleksander Medvedev told a conference call.

Putin's forecast of a deal came as the European Union piled pressure on Russia and Ukraine to resolve their dispute.

Putin is to meet Ukrainian Prime Minister Yulia Tymoshenko in Moscow on January 17.

"The European Commission believes that the meetings in coming days offer the last and best chance for Russia and Ukraine to demonstrate they are serious about resolving this dispute," Commission spokesman Johannes Laitenberger said. "The gas must flow. We will regard this period as a test case for judging whether or not they are credible partners."

At the news conference with Putin, Merkel said she was in favor of quick progress on the construction of the Nord Stream Baltic Sea gas pipeline.

"Nothing at all has changed," Merkel told a news conference when asked whether a gas dispute between Russia and Ukraine had led to a change in plans.

"We want it to be built quickly. We have an approvals process to complete. Politically, there is a commitment by the German government to this project. But we certainly can't wait for Nord Stream for gas."

Merkel added: "I think it's also in Russia's interest for gas to be delivered to Western Europe again."

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