By Andrew Rettman

EUOBSERVER / BRUSSELS - The European Commission keeps repeating promises there will be no rerun of last winter's EU gas crisis, but some analysts say lack of transparency in Russia-Ukraine gas contracts and political instability in Ukraine give cause for concern.

"It's completely clear for me that this year we will have no difficulties with gas transit toward the European market," energy commissioner Andris Piebalgs said on Wednesday (18 October) night, while standing next to a smiling Ukraine energy minister, Yuri Boyko, in Brussels.

Mr Piebalgs' latest assurance comes after he visited in early October the largest gas storage facility in Europe, located in Lower Saxony, Germany, and pronounced the tanks to be "full." The same week, a meeting of EU gas experts in Brussels concluded "there is no immediate need for concern."

Meanwhile, Ukraine Prime Minister Viktor Yanukovych on Wednesday unveiled an amicable deal on soft price hikes with Moscow that will see Kiev pay just $130 per thousand cubic metres of gas from Russia in 2007 compared to a European market price of $250.

Energy minister Boyko declared the country's transit pipelines are in "perfect" working order and signed up to an EU-Ukraine plan to install special counting stations on Ukraine's borders for transparency on how much gas comes in from Russia and how much goes out to the EU.

For its part, Russia has written off last January's gas crisis as a "hiccup" and says EU energy security fears have an "artificial" air. "The pipelines were built something like 35 years ago and for those 35 years, even through the darkest years of the Cold War, nobody worried about depending on Russian energy supplies," Russia's EU ambassador Vladimr Chizhov stated.
But some experts at leading EU think-tank CEPS are concerned about lack of transparency surrounding the key Russia-Ukraine $130 deal, which was signed between the Swiss-registered Russian-Ukrainian joint venture, RosUkrEnergo and Russian-Ukrainian joint venture UkrGasEnergo.

"If Yanukovych is expressing himself in a well-authorised manner, if he really has an agreement...I would expect this to stick," CEPS senior analyst Michael Emerson told EUobserver. "But let's have the agreement out on the table. Let's see who signed it and what it says."

Russian gas is a highly sensitive issue in Kiev, with the Kremlin's decision to give Yanukovych a soft $130 deal widely seen as a signal to Ukrainian society that it is better off sticking with Russia-compliant, anti-NATO leaders if it wants to stay warm.

"When you have a government that is opposed to the president on key issues, it's not a stable situation," CEPS' Mr Emerson warned.

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