Ukraine gas row hits EU supplies

BBC News ^ | 1/01/2006

[SpikeMike]

EU nations have started to feel the impact of Russia's axeing of gas supplies to Ukraine, as Moscow accused Kiev of stealing EU supplies.

Hungary and Poland were the first EU states to have supplies disrupted.

Russia's state-run firm Gazprom cut Ukrainian supplies from the pipelines on Sunday after talks failed to solve a politically-charged price row.

Exports to the EU are carried through the same pipes, and Gazprom now says Kiev is stealing some of that gas.

"There is information that Ukraine has begun siphoning off Russian gas that is designated for European users," Gazprom spokesman Sergei Kuprianov was quoted as saying some eight hours after the Ukrainian supply was cut.

Earlier, Ukraine's own state-run gas firm accused Russia of jeopardising Western European supplies.

"Gas is not flowing at all through some transit routes, which can lead to a fall in pressure in all the pipelines and limit the overall supply of gas to Ukraine and Europe," said Eduard Zaniuk, a spokesman for Ukrainian state-run gas giant Naftogaz.

"Naftogaz declares such actions unacceptable because they endanger gas deliveries to Europe."

Ukraine's prime minister has said his country has the right to take 15% of the remaining supplies in the pipelines as payment for transporting the gas to Western Europe.

Europe's Energy Commissioner confirmed the crisis was causing concern, despite previous Russian assurances that EU supplies would not be hit.

"The dispute definitely does not help us and keeps us worried because 20% of our gas supplies go through this route, so if there is a dispute so there are eventualities that could come out," Andris Piebalgs told the BBC.

"So we are not too certain if everything will happen as both sides have promised us."

EU governments are convening a meeting of their gas industry experts in Brussels on 4 January to discuss the crisis.

Some EU countries rely particularly heavily on Russian gas. Germany, for example, gets about 30% of its gas supplies through Ukraine.

Polish concern

In Hungary, gas firm MOL said its supplies from Russia were already down 25%, Reuters news agency reported.

The firm had ordered big consumers to switch to oil from Monday wherever possible, the agency said.

Earlier, Polish gas company PGNiG reported that the amount of gas entering its pipeline system from Ukraine was also down, according to the AFP news agency.

Kiev continues to insist that the loss of Russian supplies - which amount to 30% of its own national consumption - will not hit ordinary Ukrainian consumers during the harsh winter.

However, it has warned that supplies to industry may be affected.

The Ukrainian crisis erupted after Gazprom announced it was quadrupling the price of its gas supplies from $50 to $230 per 1,000 cubic metres.

Ukraine rejected the increase, saying it was prepared to pay a higher price but not on that scale.

Kiev has said it is currently prepared to pay no more than $80 per 1,000 cubic metres of gas.

Many Ukrainians believe Russia is punishing them for their Orange Revolution and the election of Western-leaning President Viktor Yushchenko.

Other countries which remain in Russia's sphere of influence continue to receive gas at below-market prices.

[Lukasz]

You know what that means? It's sad but it has to be said, it means Ukraine is stealing gas the western countries (EU countries) are paying for. As for the whole situation it's an obvious blackmail of the Russia govt.

They have contract so it is their gas also. But beside of that Kremlin might send less gas for Europe and then blame Ukraine in their propaganda war. You cannot execute this possibility, Russians became absolutely mad. Who knows better than we Poles how many times recently Kremlin lied about Poland? Our food for example, this case really stinks.

[A. Pole]

I see Russia is following Nazi's suit.

This is hysterical - you compare the refusal to sell oil at 20% of market price with Nazism?

[A. Pole]

But beside of that Kremlin might send less gas for Europe and then blame Ukraine in their propaganda war.

This can be remedied very easily. EU observers can monitor how much gas enters the pipeline on Russian border and how much goes from Ukraine to Poland.

[Lukasz]

This can be remedied very easily. EU observers can monitor how much gas enters the pipeline on Russian border and how much goes from Ukraine to Poland.

Correct, we will send one of our boys with Baltic expedition. We are the closest neighbors so it is our job. LOL

[A. Pole]

Correct, we will send one of our boys with Baltic expedition. We are the closest neighbors so it is our job. LOL

I guess it will be Germans and others who buy and pay the most.

[Lukasz]

Do you trust to Poles or not?

[dennisw]

Thanks for the information. Duly noted.

[dennisw]

Russia's plan is to use its resources as a political weapon against the EU.

Why not, it worked great for the Arabs.

[A. Pole]

Do you trust to Poles or not?

Usually yes, but will Germans who pay billions of dollars for gas, be willing assign the job to the Poles? After all they are the party to this Baltic pipeline.

[A. Pole]

This is the provocation and a potential "justification" to invade Ukraine militarily under the pretext of protection of the pipelines against gas theft.

Are you serious?

[montag813]

Ukraine provides gas transport from Russia to the EU, so Russia cuts off the supply to show the EU where their gas comes from.

Perhaps Ukraine should cut it off permanently.

[SpikeMike]

I've also found this: According to the contract signed by Russian state company Gazprom and Ukrainian state company Naftohaz Ukrainy on June 21 2002, which is valid to the end of 2013, the payment for the transfer of Russian natural gas through Ukrainian pipeline system has to be made in the form of barter exchange, i.e. a certain share of gas pumped through the Ukrainian territory was given to Ukraine for its own use as a payment for the transfer. Originally, the amount of gas to be shipped as payment for the transfer was supposed to be negotiated every year and to be fixed by inter-governmental protocols. On August 9 2004 the two companies signed an addendum #4 to the contract, according to which the amount of gas given as a payment was calculated based on the tariff of $1.09 for transportation of 1,000 cubic meters to the distance 100 km and the price of the natural gas $50 per 1,000 cubic meters. According to the addendum the price is not subject to changes until the end of the year 2009 [1]. Gazprom argues that addendum #4 is only applicable provided that the two countries sign an annual Intergovernmental Protocol specifying the terms of gas transit, and two conditions are satisfied: first, that gas transit services are to be settled by gas supply, and second, that the transit price is fixed at US $50 per 1,000mі. According to Gazprom, if the annual Protocol is not signed under these terms, the addendum #4 becomes void [2].

[spanalot]

"Stoip ukarnina thivery or Russia will stop delivery. "

What thievery? Putie is reneging on a contract that sells gas to Ukraine at $50 thru 2009.

[RusIvan]

What thievery? Putie is reneging on a contract that sells gas to Ukraine at $50 thru 2009.==

There no such conract. It is the reason why we not see ukrainian lawsut in court.
To flap your tong at media is easier then go to court where you need to prove your allergations.

[RusIvan]

Your information is right.

Ukarnian authority know it too that is why we will never see them in court with thier compains. They like to flap thier tongs in media and lie to own people and whole world.
They were successful in making fools from someone here already.

[kaiser80]

Russia and Europe need safer routes. NEP will be the solution of this problem. STOP NOW UKRANIAN THIEVERY! STOP GAS TRANSIT THROUGH UKARINE! LOL

[tomjohn77]

Well another case that bothers me is that the Russians are excluding Norwegian Salmon from their markets. The reason being that our fish is too polluted. Down in Singapore they found our Salmon to be perfectly healthy. This is also a political trick. The irony is that suddenly the Russians care more about pollution than Norway and Singapore. Everybody that is sane know that this is all bull.. If you compare everything from fishing boats to industry we are light years in front of them when it comes to rules and regulation of pollution.
This ethic and moral is disgusting.
They obviously lie and I never trust a liar. On the other hand you should be able to charge the right price for your product.

[tomjohn77]

Well another case that bothers me is that the Russians are excluding Norwegian Salmon from their markets. The reason being that our fish is too polluted. Down in Singapore they found our Salmon to be perfectly healthy. This is also a political trick. The irony is that suddenly the Russians care more about pollution than Norway and Singapore. Everybody that is sane know that this is all bull.. If you compare everything from fishing boats to industry we are light years in front of them when it comes to rules and regulation of pollution.
This ethic and moral is disgusting.
They obviously lie and I never trust a liar. On the other hand you should be able to charge the right price for your product.