Page last updated at 12:15 GMT, Tuesday, 24 March 2009

Putin scorns EU-Ukraine gas deal

Ukraine's Prime Minister Yulia Tymoshenko and President Viktor Yushchenko in Brussels, 23 Mar 09
Ukraine's leaders have had a bitter row over gas exports

Russian Prime Minister Vladimir Putin has dismissed an EU-Ukraine gas deal as "unprofessional", saying Russia - the main supplier - had not been consulted.

"If Russia's interests are ignored, then we shall also be forced to start reconsidering the principles of our relations with partners," he warned.

On Monday, Ukraine signed a deal paving the way for $3.4bn (£2.4bn) of Western investment in its gas infrastructure.

Ukraine's president pledged to stamp out corruption in the gas industry.

The agreement comes after a price dispute between Ukraine and Russia in January led to a shutdown of gas supplies to much of Europe for weeks, causing severe shortages for millions.

Russia says it is postponing talks with Ukraine because of Monday's gas deal in Brussels. President Dmitry Medvedev said the talks, due next week, would take place only once Russia had clarified a number of issues.

Speaking in the Russian Black Sea resort of Sochi on Monday, Mr Putin said the deal was "at the very least ill-considered and unprofessional because discussing such issues without the main supplier is simply not serious".

Despite their bitter rivalry, Ukrainian President Viktor Yushchenko and Prime Minister Yulia Tymoshenko were both in Brussels for an international conference with the European Commission, the World Bank and other key lenders.

The EU gets 80% of its gas supplies from Russia via a network of more than 13,000km (8,060 miles) of Ukrainian pipelines, some of which are 40 years old.

Russia has already engaged Germany, Italy and several other EU states in alternative gas pipeline projects - Nord Stream and South Stream - that will bypass Ukraine.

Key among Ukraine's promised reforms was the independence of the authority in charge of the pipelines from the state-owned energy company Naftogaz, which one Western banker described as a big black box where money just disappears.

Gas pipelines affected Gas network in Europe

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