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Russian President Dmitry Medvedev: Igor Ivanovich, let's talk about the gas issue. How are we doing on supplying European consumers with Russian gas?

Deputy Prime Minister Igor Sechin: Dmitry Anatolyevich, Gazprom keeps trying to get this gas moving and has confirmed the volumes required by Western consumers, especially the most affected countries, those in the Balkans and Slovakia. But this gas is still not being pumped by the Ukrainian side.

Moreover, according to information we received today from Kiev, efforts to implement your proposal on gas swap operations aimed at maintaining the priority needs of Moldova and Slovakia have also not been successful.

President of Slovakia Ivan Gasparovic has gone to Kiev and tried to persuade the Ukrainian side to take part in the gas swap, as has the Prime Minister of Moldova, Zinaida Grecanii. But our Ukrainian colleagues maintain that such operations are impossible, despite the information sent to Gazprom by Deputy Chairman of Naftogaz of Ukraine concerning the feasibility of conducting such operations.

Dmitry Medvedev: That is inexplicable.

I spoke yesterday with the President of Ukraine and reiterated the urgency of getting gas to the countries that have suffered the most from the closing of Ukraine's gas pipes — Slovakia, Bulgaria and Moldova. I pointed out that these gas exchange operations, the so-called swaps, could be implemented so that Ukraine could send them its gas and our gas would arrive in Ukraine.

This means that they have nothing to lose and this is not even the question of prices, which are yet to be decided upon. They refuse. That is astonishing and from an ethical point of view simply inexplicable, because they have chosen to put European consumers in a very difficult position, especially those in the Balkans who are suffering because they don't have enough gas.

Igor Sechin: It's inexplicable from both an ethical and an economic point of view, because gas exchange transactions in the form of transport swaps are indeed a less expensive way of delivering gas, because there is no need to actually pump it.

Dmitry Medvedev: That is the whole point.

And in a conversation with the President of Ukraine, he told me that they would look into this issue. The fact that they have refused confirms an indisputable fact, that they are thinking primarily about their own interests, about satisfying their own consumers, and not giving any thought to transit or other functions.

Another issue that I raised during my conversation with the President of Ukraine was the creation of a consortium of European companies with temporary rights to the gas that must be put into Ukraine's pipelines so that its gas transmission system can get back to its normal pressure, something which would in turn enable Ukraine to begin normal gas transportation. I suggested this to the Ukrainian President but he did not give me an answer.

I would like to know how we are doing on the creation of such a consortium and whether European companies are interested in this, because the Government Cabinet already met yesterday to discuss it. Some companies have expressed their desire to participate, some of the major companies. How is the creation of the consortium going?

Igor Sechin: Your proposal has been supported by the largest European producers and consumers of gas. As you know, yesterday the Prime Minister of Russia met with the head of the Italian company ENI. Today in Berlin discussions with the heads of these companies are continuing and we have been informed that E. ON Ruhrgas, Gaz de France, ENI, WINGAS and supposedly OMV, an Austrian company, are interested in participating in the consortium.

Representatives from the respective companies are working on formulating agreements for the consortium.

Dmitry Medvedev: Let me draw your attention to the fact that, like the gas swap operation, such a consortium would not require Ukraine to pay anything whatsoever — that is, transmission of gas on behalf of the consortium would not require any payment from Ukraine at the moment.

This can be taken into account in subsequent calculations, but for now it would simply resolve the problem. I hope that Ukraine will give serious consideration to such proposals.

We agreed with our colleagues during a meeting in Moscow of a number of heads of European governments that we should hold a special summit on this subject. I took this decision and called the European heads of government and state, all the individuals concerned in the countries that receive Russian gas as well as transit countries, to take part in this summit to be held tomorrow [17 January]. We are preparing for the summit. What do you have to report on this?

Igor Sechin: Dmitry Anatolyevich, we are preparing for the implementation of your instruction; we are receiving confirmation of the arrival of the heads of state and government of European countries.

Dmitry Medvedev: Good.

I see the purpose of this summit as not only to resolve the current gas crisis, which the Russian Federation believes that Ukraine is fully responsible for, but also to prevent such crises in the future.

I have already talked about this and would like to say once again that neither the Russian Federation nor European consumers should be dependent on the affairs of Ukraine's political elite — how they divide the gas, why, and who holds which positions. We need to perform our duties properly just as the contract stipulates – to sign these contracts in a timely fashion and pay for them on time.

If this does not happen we must think about a new mechanism to protect our interests and those of European consumers. In this connection, of course we need to think about and pay attention to the possibility of increasing the capacity of both North Stream and South Stream because we cannot be so dependent on a transit state, with all due respect to the people who work there.

And the last thing. Russian companies are suffering because of this problem, including, of course, Russia's largest gas company and our infrastructure monopoly Gazprom, which has incurred the biggest losses. I spoke to Gazprom's CEO [Alexei Miller] and I would like to tell you the following. We need to monitor the situation very carefully, calculate these losses and prepare for legal action. What is being done in this regard?

Igor Sechin: Indeed, the damage caused by the interruption of gas supplies affects not only European consumers but Gazprom as well, and the damage continues to escalate.

To date the preliminary amount of damage estimated by Gazprom's experts amounts to about 1 billion 200 million dollars and apparently this is not the final figure. In this regard, Gazprom's lawyers are currently finalising a formal complaint to the Stockholm International Arbitration Court.

Dmitry Medvedev: We need all these procedures to be followed through, and if not tomorrow then at least in the foreseeable future, because as a person with a legal background I assume that wrongful conduct must be punished.