Russia-Ukraine middleman may hold key to gas talks

KIEV (Reuters) - A Swiss-based trader that sells Ukraine all its imported gas may be a key obstacle to resolving a dispute with Russia that has caused the worst disruption to European gas supplies in years, officials and analysts said.

Russia turned the gas off to Ukraine from Jan 1. over unpaid bills and gas prices. After the row deepened, Russian gas flows to Europe were also halted with Moscow accusing Kiev of blocking supplies and Ukraine saying Russia suspended deliveries.

As a flurry of talks take place to find a resolution to the dispute, the name of RosUkrEnergo (RUE) -- which is domiciled in Zug, Switzerland -- is increasingly being mentioned by senior officials in both Ukraine and Russia as a sticking point.

Ukraine says it buys all of its imported gas from RUE, a 50/50 joint venture between Russian state-controlled gas behemoth, Gazprom, and two Ukrainian businessmen. RUE in turn buys Russian and Central Asian gas from Gazprom.

But opponents, such as Ukrainian Prime Minister Yulia Tymoshenko and some Gazprom minority shareholders, have questioned why the intermediary is needed at all.

That has provoked fevered speculation about who ultimately benefits from RUE and made it a political football in both the dispute between Tymoshenko and Ukrainian President Viktor Yushchenko and the row with Russia.

A RUE spokesman denied that Ukrainian or Russian politicians have commercial interests or benefit from its activities.

When asked about RUE, Russian Prime Minister Vladimir Putin said on Thursday that Gazprom was ready to sign a direct contract with Ukraine's state-run energy company, Naftogaz, but that Ukraine was not allowing it to.

"We are ready to sign a direct contract with Naftogaz Ukraine, but they are not allowing us to do that," Putin told reporters at a news briefing.

Gazprom and senior Ukrainian officials have repeatedly said they are ready to get rid of RUE, but the firm has been kept in the bilateral gas trade every year.

GAS TRADER

In October 2008, Tymoshenko and Putin signed a memorandum that stipulated that gas supply intermediaries like RUE would be scrapped. But Putin said on Thursday that corrupt officials in Kiev were taking advantage of a "political collapse" in Ukraine.

"This speaks of a high level of corruption in political structures which are today, in these conditions, fighting for gas prices and for the chance to preserve this or that intermediary to use dividends from them for personal enrichment and for future political campaigns," Putin said.

Ukraine's Fuel and Energy Ministry said on Wednesday that RUE had helped cause the whole row. Tymoshenko has repeatedly said RUE is "a corrupt intermediary" which is being protected by top politicians.

"We are not occupied with politics we are occupied with business," a RUE spokesman said. "Business involves contracts and the timely, proper fulfillment of obligations by all sides. We strive to do that and we expect the same from counteragents."

When asked about Tymoshenko's claim, a RUE spokesman said: "I simply do not understand the allegation of corruption at all if since 2006 the company delivered gas at acceptable prices for Ukraine and always fully fulfilled all its contracts."

"Such statements should remain on the conscience of those who make them," the spokesman said.

Gazprom owns half of RUE and Vienna-based Centragas Holding AG owns the other half.

Ukrainian businessman Dmitry Firtash's Group DF (GDF) owns a 90 percent stake in Centragas Holding AG. Firtash's Ukrainian business partner, Ivan Fursin, owns the other 10 percent in Centragas Holding AG.

Reuters sent repeated emails over the past four days to Centragas asking for an interview with Firtash. A correspondent sent a list of questions which a spokeswoman said had been forwarded to Firtash. An interview has not yet been granted.

Naftogaz's chief, Oleh Dubyna, told Reuters in an interview on Wednesday that he would rather resign than allow RUE to remain as the exclusive intermediary for Ukraine's gas imports.

"RosUkrEnergo is one of the key issues in this dispute and so is likely to be one of the key issues in the talks aimed at resolving it," said Tom Mayne, director of Global Witness, which campaigns for transparency in business and which has written several reports on RosUkrEnergo.

"If RosUkrEnergo is part of the problem, and it seems to be, then it is Europe's problem too now," said Mayne by telephone from London.

"The fact that RosUkrEnergo still remains - despite the opposition from Tymoshenko and Naftogaz's Dubyna and after Putin and Tymoshenko agreed to do away with it -- indicates that some people very much want the company to stay, and we are not quite sure why," he said.

(Writing by Guy Faulconbridge in Kiev; Editing by Janet McBride)