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Interview: Russia, Ukraine far from resolving gas disputes: expert

(Xinhua)

13:50, August 24, 2011

MOSCOW, Aug. 23 (Xinhua) -- While the former Ukrainian Prime Minister Yulia Tymoshenko was put on trial over the gas deals she signed with Russia in January 2009, current Russian and Ukrainian leaders have been deadlocked in the on-going dispute over gas supply, with neither ready for any concession, said a Russian expert on Tuesday.

So far, there was no light in the end of the tunnel and all the deals already signed have been hung up, Sergei Chizhov, president of the Russian Gas Society, told Xinhua in an exclusive interview.

The trouble lies in Moscow's departure from its earlier policy of subsidizing gas shipment to Ukraine for political reasons and switching to the purely market relations with Kiev, he explained.

The gas dispute between the two countries started in 2005, when the upward trend in gas prices became visible and Moscow's disappointment with Kiev's foreign policy was growing. That year Russia decided there were no more reasons to supply Ukraine with gas at discounted prices.

Since then both countries have been looking for mutually acceptable outlets from that deadlock as their presidents and prime ministers met constantly. During the latest meeting between Russian President Dmitry Medvedev and his Ukrainian counterpart Viktor Yanukovych on Aug. 11, the two sides admitted that they were still divided on issues like gas price.

Chizhov, who is also a former energy adviser of Vladimir Putin, recalled that the two sides had proposed to establish a joint venture run by Russia's Gazprom and Ukraine's Naftogaz, but the idea has been remaining on paper only ever since.

"Moscow repeatedly rejected Ukraine's pleading to provide discount for Russian gas, demanding in return that Kiev provides Russia with some sort of 'political discounts'. Moscow feels no rush because after the completion of two new pipelines - North Stream and Southern Stream, Ukraine will lose its advantage of being a transit country," Chizhov said.

The expert pointed out that the unresolved gas dispute has hampered Russian-Ukraine cooperation in a number of projects, such as nuclear energy, Antonov aircraft building, as well as joint maintenance of the Russian Navy base in Sevastopol and the development of the gas fields on the Black Sea seabed.

Asked about his opinion on Tymoshenko's current trial, Chizhov noted that the then-Prime Minister of Ukraine has made her political career by ending a "gas war" between Gazprom and Naftogaz, which posed threat to Europe's energy stability in winter of 2009.

But due to that deal, now Tymoshenko has been accused of yielding to Gazprom's "blackmail" and agreeing to buy overpriced gas from Russia.

"These accusation not necessarily are incorrect. In the dire situation Ukraine found itself in 2008/2009 winter, Gazprom could actually be tempted for arm-twisting. However, this situation should be investigated separately. At the moment, it is still unclear, whether the deal signed by Tymoshenko was based on economical necessity or it had strong political flavor. The same could be said about the current trial in Kiev," Chizhov said.

After Yulia Tymoshenko was arrested in early August, Russian Foreign Ministry has swiftly intervened, issuing a statement with demands of the "fair trial" and stressing that the gas deals were signed on the fully legal international basis.

"Moscow may start feeling a certain disappointment with ( Ukrainian President) Viktor Yanukovich whom the Kremlin eagerly supported. While paying lip service to Russia, he is determined to lead his country to the European Union and bluntly rejects all Moscow's courtship and invitations to join the Customs Union (of Russia, Belarus, Kazakhstan)," the expert said.

"Moscow speaks in defense of Tymoshenko because Russian authorities regard her (one of) the few Ukrainian politicians who have virtually saved Russian image as a reliable energy supplier in the eyes of the Europeans," Chizhov said.

The Russian Gas Society, established in 2001, is a nonprofit organization of Russian oil and gas companies.

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