Ukraine’s deal to settle its dispute with Gazprom over debts owed by its gas companies Rosukrenergo and Ukrgazenergo does not look great from Ukraine’s point of view.

The debts - which have mysteriously risen from $1.3bn to over $2bn - are to be paid off mainly in gas held in storage in Ukraine. Those comforting gas reserves were one reason why the threat to cut back supplies to Ukraine did not seem so frightening. Now those reserves will be lower.

The EU is still looking pretty comfortable: only in Italy is the danger of supply disruption creating genuine nervousness. That could make Ukraine look even more isolated if tensions flare up again.

It might have been better to have the fight now, than in the middle of winter.

UPDATE That dispute gave added edge to the energy security conference now on on Vilnius. Five countries - Ukraine, Poland, Azerbaijan, Georgia and Lithuania - agreed to form a consortium to advance their plan for an extension of Ukraine’s Odessa-Brody pipeline into Poland. (The Azeri take here, in slightly skewed but comprehensible English.) Ukraine’s president Viktor Yushchenko hailed what he called a "historic" agreement.

As I write, the state of Gazprom’s dispute with Ukraine remains unclear. The Russian company is declaring victory, but the government that has apparently agreed to pay Gazprom’s missing $1.3bn is the old one, not the new one that is expected to come to power after the elections at the weekend.

Further west, consumers who suddenly found they needed to know about Ukraine in January 2006, when the last dispute over gas supplies turned nasty, can afford to stay relaxed, for now at least. European gas prices have barely twitched. There is plenty of gas in storage - except in Italy - and the weather is warm. European solidarity with Ukraine, however earnestly expressed, will not have much political force behind it.

The worrying thing for Ukraine is that ten years from now, it could be even more isolated. At the moment, it is still a very important transit country: 80 per cent of Gazprom’s exports to Europe go through it. But Gazprom’s strategy is to by-pass transit countries as much as it can, with projects such as Nord Stream and South Stream. Even Nabucco, the EU’s favourite pipe-dream pipeline, might end up carrying quite a lot of Russian gas, through Turkey and into Austria. If those pipelines get built, Ukraine could be needed for only 40 per cent of Gazprom’s exports. And that will make choking off gas supplies that much easier.

By the way, if you want to know everything there is to know about gas in Ukraine, a great place to start is an excellent paper by Simon Pirani of the Oxford Institute for Energy Studies, available here.

Health campaigners and politicians are in a flap over the ambitions of Gazprom, Russia’s gas monopoly, to supply the National Health Service, one of the UK’s largest gas consumers, the Times, of London, writes. Rather than worrying about the NHS keeping its bills down by choosing the cheapest supplier, the naysayers are concerned about Russia’s reliability. Meanwhile, Russia itself is having trouble supplying energy to some of its own more remote regions. At least that is the explanation its officials are giving as the country this weekend began construction on the first of six floating nuclear stations, Russian news agencies reported. To allay safety concerns they are reassuringly citing the the sinking of the Kursk submarine in 2000. The vessel may have failed, but the nuclear reactor could be switched right back on as soon as the sub was raised. Phew.