Ukraine signs gas monitoring deal

After a meeting with Ukrainian Prime Minister Yulia Timoshenko in Kiev, he said the transit of Russian gas to Europe could be resumed within 36 hours.

The Czech Premier, whose country holds the EU's rotating presidency, flew to Kiev after talks with Russian PM Vladimir Putin.

Watch Vladimir Putin's media conference

Putin insisted that Russia could only guarantee the safety of gas supplies to Europe once monitors were deployed at gas stations at Ukraine's borders:

"If the theft of Russian gas by Ukraine begins again, Russia will restrict supplies again," he said.

He issued a warning to Ukraine about siphoning off gas meant for the EU, something Kiev has hotly denied doing.

While Moscow accuses Ukraine of stealing fuel, interrupting transit and sabotaging Russia's reputation, Timoshenko insists that Ukraine is a reliable transit partner and it does not prevent supplies getting through to Europe. She also said Kiev had fully paid its gas debt to Gazprom.

Earlier the chief executive of Russian energy giant Gazprom, Aleksey Miller, said once the deal is signed and the multilateral monitoring commission starts work, Gazprom will pump a minimal amount of gas through Ukraine, aimed particularly at the Balkan states. If none of this gas is stolen en route, he said, the amount will be increased immediately.

"The document that was signed today stipulates all the conditions for the independent control of natural gas transit through Ukrainian territory. And the main goal of this document is to facilitate a real mechanism of control to guarantee that 100 per cent of the gas intended for Europe that enters Ukraine, exits Ukraine," said Miller.

Europe has not received any gas from Russia since Moscow was forced to fully stop sending gas through Ukraine on January 7. Gazprom says supplies to Europe are down 86 million cubic metres since the beginning of the year.

Russia's energy giant says Kiev still owes it more than US$600 million for earlier gas deliveries.

Negotiations on a new contract between the two countries remain on hold.

However, there are international charters which say that, regardless of any dispute, transit countries are required to deliver gas.

"In the event of disputes, the transit country is bound to procure uninterrupted passage of energy resources regardless of the stake of the dispute, regardless of the time that it takes to be settled. Ukraine appears to be disregarding this," said Konstantin Luzinyan-Rizhinashvili, international lawyer from DLA Piper.

Meanwhile, both Ukraine and Russia have been criticised by the European Union for letting the dispute go so far.

Homes are unheated, schools and businesses closed and people are freezing because of the deadlock.

Hundreds of thousands of Europeans have faced severe gas shortages, but Bulgaria, Slovenia, and Serbia are feeling the brunt, while Germany, also hit by the halt, has tapped into its reserves.

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