Russian gas starts trickling into Europe again

After destroying the credibility of both Russia and Ukraine as fuel suppliers to Europe, the flow of Siberian gas once again resumed into the European Union (EU) yesterday, bring to end the bitter dispute between the two countries over the pricing of gas.

Consequently, European nations are now seeking alternatives to Russia's monopoly over a quarter of their fuel supplies, and are looking at options that will reduce their dependence on Russia, reports said.

Russian and Ukrainian gas companies Gazprom and Naftogaz managed to finally agree on a decade-long pact on gas pricing and transit through Ukrainian pipelines to Slovakia in the EU, as Kiev allowed Russian gas to flow onwards for consumption in Europe without interruption. The move marked the end of what was noted thus far as possibly the worst in what is panning out as a series of political issues between Russia and Ukraine.

European leaders were reported to be patting themselves on the back for successfully mediating between Russian prime minister Vladimir Putin and his Ukrainian counterpart Yuliya Tymoshenko, though the significance of the three-week long gas dispute was not lost on them.

Reports quoted José Manuel Barroso, president of the European commission as saying that the mediation had been "a team effort and an effective unified voice." He also reminded EU nations that this was an unacceptable situation where European consumers of Russian gas transported through Ukrainian pipelines were held hostage. "It is difficult to welcome something that should not have happened in the first place. It was utterly unacceptable that European gas consumers were held hostage", he was quoted as saying.

For Gazprom, the immediate economic cost of the dispute in the middle of the current economic crisis is being estimated at over $1 billion. On the other side of this lose-lose game, Ukraine would now have to pay almost double the price of gas to Russia, besides the dispute having eroded Kiev's reputation and beign a setback to its aspirations for integration with Europe.

Around 20 European countries were left without supplies of gas from Russia for around two weeks at the height of the winter, a freezing situation that has ensured traditionally pro-Moscow countries to rethink their allegiances, reports said.