EU seeks to finalize Russian gas monitoring deal

MOSCOW/KIEV (Reuters) - The European Union sought to finalize details on Friday of a gas monitoring deal to allow the resumption of gas supplies to Europe via Ukraine, which have been cut off for days over a pricing row.

But Ukraine made clear the continued political rancor underlying the dispute, which has closed some factories in eastern Europe and raised fears in the EU over future reliance on Russian gas deliveries.

"Those statements that have in recent days been heard from the mouth of the Russian leadership -- they are incorrect, they humiliate Ukraine," President Viktor Yushchenko told a news briefing, apparently referring to accusations by Russian Prime Minister Vladimir Putin of high-level corruption and disarray in Kiev.

Czech Prime Minister Mirek Topolanek, representing the EU presidency, said there was agreement with Ukraine and a "similar pledge" from Russia to allow experts from either side to work in the other country under a process to monitor gas flows from Russia to Europe.

"Some technical details remain to be fine-tuned in a way to remove the last doubts and to replace a crisis of confidence with confidence that gas that the Russians want to send and Ukraine wants to transit, reaches its destination," he said after meeting senior Ukrainian officials in Kiev.

Topolanek was expected to fly on to Moscow on Saturday for talks with Vladimir Putin, a spokesman for the Russian prime minister said.

The presence of monitoring missions along the transit routes for Russian gas will reassure Moscow that the gas it pumps across Ukraine is not being siphoned off by Kiev.

Moscow cited this allegation -- denied by Ukraine -- as its reason for shutting off gas through its ex-Soviet neighbor earlier this week.

The EU gets a quarter of its gas supplies from Russia, 80 percent of which pass through Ukraine. So far, supplies to 18 countries have been disrupted by the dispute.

Alexei Miller, head of Russia's state-controlled gas monopoly Gazprom, said Ukraine had given verbal agreement for deployment of the monitors.

"As soon as the document has been signed ... and observers are ready for practical work on the gas stations, transit of gas via Ukraine will be possible," he said in a statement.

The dispute between Kiev and its former Soviet master follows tensions over Ukraine's efforts to join NATO, a move bitterly opposed by Moscow and viewed with wariness even by European members of the alliance and by investors.

Ukraine has been beset for months by political squabbling between Yushchenko and his former ally, Prime Minister Yulia Tymoshenko, notably over ties with Russia.

The European Commission said a team of 20 observers, including experts from major gas companies and senior officials from the EU, had already arrived in Ukraine and begun work.

The gas is likely to be delivered only to Europe, not Ukraine itself, since Moscow and Kiev have yet to agree a price for the gas, subsidized since Soviet times. Russia has repeatedly said Ukraine must now pay the going market rate.