Russia signs deal, restoring Europe's gas

MOSCOW, Russia (CNN) -- Russia signed an agreement Monday to restore gas supplies to Europe after Ukraine dropped conditions that had angered Moscow.

Moscow and Kiev have been engaged in a bitter, weeks-long dispute over gas, which interrupted supplies to countries from Turkey to the Baltics during an unusually cold winter.

They agreed earlier to a deal which the European Union brokered to end the standoff, but Sunday it looked as if the deal had hit the rocks.

Russia said it was off because Ukraine -- the key transit country -- had attached unacceptable terms to the agreement.

Russia responded furiously, with the country's president and prime minister and the head of Gazprom all weighing in.

Prime Minister Vladimir Putin said on television the attachment was unauthorized, and "ties up the existing problem (of transit) with issues that have nothing to do with it."

Gazprom CEO Alexey Miller told Russia reporters the attachment was "an attempt to legalize the theft" of gas, Interfax reported.

But Monday it appeared the deal was back on, and a delegation from Russia went to Brussels to sign it.

"We held talks in Kiev this morning. After the talks the Ukrainian side signed the rules for monitoring natural gas transit via Ukraine without any additional remarks," Deputy Gazprom CEO Valery Golubev told reporters.

Moscow and Kiev have been at loggerheads over the price Ukraine pays for Russian gas, which it distributes to other countries across Europe via pipeline.

Russia demanded sharply higher prices as of the beginning of the year, which Ukraine refused to pay. Russia shut off Ukraine's gas supply as the dispute escalated, and then cut all gas supplies to Europe on Wednesday.

The Russian energy giant Gazprom and the Ukrainian company Naftogaz have been trading accusations about supply. The Russians have accused the Ukrainians of siphoning gas from the pipelines, while Ukraine says Russia has been pumping less than it should.

The dispute has affected the supply of natural gas as far west as Germany and France. About a quarter of Europe's natural gas supply comes from Gazprom.

Czech Prime Minister Mirek Topolanek, whose country holds the rotating presidency of the European Union, flew to Kiev and Moscow last week to broker the deal. Both sides agreed to allow international observers to monitor gas flow through the pipelines to end the argument about who was responsible for dips in supply.

When the monitors are in place, Gazprom will start pumping gas for European consumers, Putin said Monday, according to Interfax.

Even if a deal is signed, it could take from 10 to 30 hours for gas to be restored, Gazprom officials said, due to the need to rebuild pressure in the pipelines. At the moment, gas supplies are still off.

The agreement does not resolve the dispute between Russia and Ukraine over prices for gas to Europe. It deals only with gas destined for Europe, which has already been paid for.

source:CNN