Innovative Solution to Allow Gas Transit to Resume

In a scheduled meeting in Moscow today Gazprom CEO Mr Miller, Prime Minister Mr Putin and Eni CEO Mr Scaroni, the Russian side proposed an innovative solution to end the current gas transit crisis.

• The proposal calls for major European energy firms to form a consortium of gas importers that would buy the technical gas from OAO Gazprom needed to deliver natural gas via Ukraine to European customers.
• In a telephone call earlier today with Ukraine's President Yuschenko, Russian President Dmitry Medvedev had proposed an innovative solution to enable Gazprom to resume transiting supplies of gas to European customers via Ukraine.  The proposal was then discussed today in a telephone conversation between Prime Minister Putin and Italian Prime Minister Berlusconi.
• Mr Putin said that from Gazprom's side the flow of gas was open, but despite all of its efforts, and all of the requests from European partners Ukraine had continued to refuse Gazprom's daily requests to transit gas to Europe. 
• Ukraine had said it was technically incapable of allowing Russian gas to reach Europe unless it received 1.7bcm of gas for technical purposes, partly to refill the pipeline system and partly to fuel the compressor stations along its network.  Whilst Mr Putin called the request for Gazprom to transfer ownership of this significant and expensive amount of gas to Ukraine absurd, he said that Russia had to help Ukraine.
• Whilst Russia was not able to take all the financial risks of providing this large volume of gas alone, it was proposing to major European partners and customers that they join together to form a consortium which would share the cost and ownership of the technical gas, which would be supplied to Ukraine to enable the resumption of supplies to Europe.    
• Ukraine would promise to pay for this gas once a price had been agreed upon.  Until then, the gas would remain the property of the international consortium in the hope that this would guarantee that it would not be illegally taken out of the Ukrainian transit system again.  It is hoped that this solution would prevent any further disruption of supplies of Russian gas to Europe.
•  Mr Scaroni called the proposal innovative and constructive, and underlined that this was a commercial rather than a political solution.  
•  All other European companies who purchase Russian gas delivered via Ukraine, such as E.on Ruhrgas, will be invited to join such a consortium in the coming hours.  Such a consortium could be put together very rapidly.
• This initiative is the latest in a series of attempts by Gazprom to do whatever it can to make sure that European customers are receiving their gas.