Posted on 01/03/2006 7:41:39 AM PST by sergey1973
3 January 2006 -- Russian authorities say gas supplies to European countries have been fully restored after a disruption caused by a row with Ukraine over gas prices, while representatives of the Russian and Ukrainian monopoly gas monopolies are scheduled to meet today to discuss the standoff.
Russia's state-run natural-gas monopoly Gazprom announced earlier today that it was increasing the amount of gas shipped through pipelines in Ukraine to assure full deliveries to customers in European countries. Gazprom has since said that supplies to European customers were back to normal.
Austria and Hungary, which had suffered supply cuts of up to 40 percent after Gazprom cut the flow to Ukrainian customers on 1 January, have announced the full restoration of deliveries from Russia.
(Excerpt) Read more at rferl.org ...
Although another big question is whether accusations that Ukrainian Naftogaz diverted gas supplies destined for Europe. Still the question that needs to be answered first by genuienly unbiased experts whether Russia is in fact in a breach of a gas delivery contract or whether contract allows Russia to demand market prices as of 2006.
I think the 3rd party (like International Arbitration) need to make its verdict on this.
Putin blinked?
Andrei Illarionov, dismissed from the post of economic adviser to Vladimir Putin in late December, told Ekho Moskvy radio on Monday, Gazprom had no right to cut off gas supplies to Ukraine on January 1 because an earlier agreement with Ukraine’s Naftogaz made it impossible for Gazprom to force a price rise to $230 per 1,000 cubic meters.
“Today’s prices, $50 per 1,000 cubic meters, were set by a supplementary agreement to a contract between Gazprom and Naftogaz which was signed on Aug. 8, 2004. The contract, according to the text of the supplementary agreement, is to be in effect for five years, up to 2009. The supplementary agreement states that the price of $50 per 1,000 cubic meters is fixed. For those who don’t fully understand the meaning of the Russian word fixed, it says two lines further down that these prices are not changeable,” Illarionov told Ekho Moskvy on Monday
From the little I've read in the last couple of days on thise, Putin caught a snoot-full of grief from the west about this move against Ukraine.
I'd say he blinked.
Yes, I heard that. Gazprom claims that this addendum does not preclude annual price review. I want to hear a 3rd party legal experts before making conclusions whether Russia or Ukraine (or both) is to blame for this crisis.
The Ukraine might also ask if the transit fees for transporting natural gas through their country to Europe are also subject to annual price review. Russia needs the pipelines in the Ukraine to deliver the natural gas to Europe.
The two countries need each other. However, if the Ukraine can find another source for natural gas, Russia needs them more.
Putin will just relized he should have waited until the pipeline under the baltic is in place. When that happens (3-4 years) these other countries will be out of luck if they don't get a plan together.
Look at it--Thanks Lukasz. Now if it's Russia's fault, then Russia is responsible. But let's see what' the standoff will come too. Hopefully it will be resolved soon and reasonable compromise will be found. Contract maybe economically unsound, but it's still a contract and if Russia breaches the contract, than it will be justifiably viewed as unreliable partner in either energy or other arenas.
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