Russia's Gazprom said yesterday gas supplies to customers in Europe had been fully restored after disruption caused by a dispute with neighboring Ukraine.

"We have fully completed work to restore gas supplies to Europe," Gazprom spokesman Sergei Kupriyanov told a news briefing. "At this time we are carrying out deliveries to European consumers in full."

Russia accused Kiev of illegally tapping off gas from the pipeline crossing its territory to Europe after the Russian gas monopoly Gazprom cut its feed for Ukraine on Sunday. States from Serbia to Germany complained of supply cuts and Washington warned Moscow against using energy as a political tool.

Moscow agreed on Monday to restore pumping close to normal levels, acknowledging there was little it could do to stop Ukraine helping itself to the gas.

"With the aim of preventing a possible energy crisis, caused by Ukraine illegally taking gas, Gazprom has taken the decision to deliver additional gas into the gas transport system of Ukraine," the company said in a statement.

"We stress that the additional delivery of gas is not designed for Ukrainian consumers but is meant for transit through the territory of Ukraine for delivery to consumers outside the borders of Ukraine."

Kiev has denied taking Russian gas but said it would if temperatures do fall below freezing.

But Gazprom repeated its claim yesterday that Ukraine was siphoning off Russian gas being piped across its territory for European consumers.

"Ukraine continues to steal gas, and has stolen 118 million cubic meters over the past day. Gazprom will once again compensate its European consumers but it cannot continue eternally and Ukraine will have to pay for it in any case," said Kupriyanov.

The European Commission urged Russia and Ukraine to "get back to the table" yesterday and settle the dispute.

The Russian ITAR-TASS news agency said Ukrainian President Viktor Yushchenko had told Polish President Lech Kaczynski by telephone that supplies to Europe were restored to normal levels two hours after Moscow had stepped up its pumping.

Poland's biggest natural gas company said yesterday that supplies from Ukraine returned to normal levels earlier that day, after a drop of 50 percent on Sunday.

Poland gets about 60 percent of its natural gas from Russia. While most of it is transported through Belarus, substantial supplies also flow through Ukraine.

Commenting on the problem, Prime Minister Kazimierz Marcinkiewicz reiterated yesterday that diversification of Poland's gas sources is a top priority for his two-month-old government.

Dispute is 'commercial'

Russia's state-controlled Gazprom cut supplies to Ukraine after Kiev rejected demands it pay four times more for its gas a sharp break with subsidised prices rooted in the Soviet era.

Russia said the demand simply brought prices in line with market rates while Ukrainian officials alleged the Kremlin was seeking to undermine their government.

Europe receives 25 percent of its gas from Russia. Moscow has since Soviet times promoted itself as a reliable gas supplier an image it seeks to enhance as chairman of the G8 group of leading industrial nations.

But events in the past 36 hours sent a chill through capitals and energy markets.

Gazprom said it would pipe across an extra 95 million cubic meters of gas a day to Europe via Ukraine and planned to restore full supplies to European customers but not to Ukraine by yesterday evening.

On Sunday, it had cut volumes going along that route by 120 million cubic meters a day.

Analysts said there was little EU nations could do for now to lessen their dependence on Russian energy because there were no readily available alternatives.

"We don't see much downside from all this for either Gazprom or Russia," Timothy Ash, an analyst with Bear Stearns investment bank said in a research note.

"The EU/US have little real leverage on Russia, given that Gazprom is simply asking Ukraine to pay what West European states already pay for energy. Why should Russia give Ukraine a discount?"

But Germany, Russia's biggest gas customer, said it would think twice about increasing its imports of Russian gas unless Moscow proved it was a dependable energy supplier.

Meanwhile, Kiev and Moscow were left arguing over who owned the gas flowing between their two countries difficult to prove in the maze-like distribution system inherited from the Soviet Union.

Ukraine said it had enough gas from alternative sources.

Those sources, it said, included gas arriving via Russia's pipeline network from central Asian Turkmenistan. But Gazprom said that gas was Russian, not Turkmen.

(China Daily January 4, 2006)