Skip to comments.The other gas crisis
Posted on 01/01/2006 7:32:32 PM PST by A. Pole
Driving to New York City this holiday season? What if you couldn't drive through New Jersey because that state and New York had been unable to agree on the tolls at the Lincoln Tunnel?
Up to 80 percent of Russia's gas exports to Western Europe pass through Ukraine, and this accounts for about 25 percent of Western Europe's supply of natural gas.
The two sides had originally agreed to sign an agreement by July 1 on gas rates for 2006. But Ukraine's strategy was evidently to delay. Aleksey Ivchenko, head of the Ukrainian gas company Naftogaz, was reported by Kommersant Ukraina in October to have said, "We shall wait until the end of the year and then if Gazprom will not sign with us the agreement on the transit of gas, we shall begin technical seizure [of the pipeline]."
More generally, this kind of attitude hurts Ukraine's reputation in its efforts to attract Western investment. No foreign investor wants to worry about whether it can protect its investment in the event of adverse commercial conditions.
Is this truly in Western interests? Further east, recently, Kazakhstan inaugurated a new oil pipeline to China, a rapidly expanding market. So it is in the interests of all countries in Europe, as well as the United States, to keep oil and gas flowing smoothly on commercial terms to the West.
Commerce in hydrocarbons cannot easily continue if one country uses the simple fact of geography to exact exorbitant fees from users of the pipeline in other countries.
A year ago, the West celebrated the Orange Revolution and Ukraine's re-emergence as a democratic state. This time, however, those who believe in free markets and freedom of commerce must side with Russia.
(Excerpt) Read more at washtimes.com ...
Putie is reneging on an existing contract - this is an act of war and its no wonder that Reagan fought against this pipeline being built.
During the period between 2005 and 2009 the Customer (Gasprom) will sell annually natural gas at the price of 50 US dollars for 1000 cubic meters, which is not subject to change by the parties, from the gas transportation services of Russian natural gas through the territory of Ukraine to ensure the gas balance of Ukraine.
Because you say so.
I wrote in Reagan in 1972 - who did you vote for - Brezhnev?
In 1972, in Poland there was Communist approved one list to vote for. And I never went to vote for such list.
Is there a signed agreement or not? This WashTimes story seems to say that there was never a signed agreement.
- As a matter of fact there is a contract between Naftogas of Ukraine and Gasprom of Russia on volume and conditions of transit of Russian natural gas through the territory of Ukraine for the period between 2003 and 2013. It is currently in effect. I cannot imagine how a public company bound by contract obligations can refuse to fulfill them. I asked the deputy head of Gasprom, Oleksandr Riazanov, during our negotiations in Moscow on December 19 in the presence of the head of the Russian Cabinet Mikhail Fradkov: Is the contract effective? And he said: Yes.
- Then why do the Russians say that they will stop contract supplies of gas to Ukraine on January 1, 2006?
- One can always find a reason to make a statement. But in article 14 of this contract it is clearly stated that: This contract comes in effect on January 1, 2003 It remains effective until 10 am on January 1, 2014. And one more thing: During the period between 2005 and 2009 the Customer (Gasprom) will sell annually natural gas at the price of 50 US dollars for 1000 cubic meters, which is not subject to change by the parties, from the gas transportation services of Russian natural gas through the territory of Ukraine to ensure the gas balance of Ukraine.
- What do you think of possible arbitration with Gasprom?
- Any disputes about these contract or as a result of it are subject to examination and final settlement in the Arbitration Institution of the Chamber of Commerce in the city of Stockholm. (This is Article 12 of the contract). I am not afraid of possible arbitration. Ukraine has already had a positive experience of arbitration. So if we have to appeal, we know what to do and where to go.
Isn't the anger over the fact that gas isn't flowing under market value prices?
Thanks for your reply.
"Isn't the anger over the fact that gas isn't flowing under market value prices?"
Thre are a wide range of similar bi-lateral agreements between Ukraine and the Kremlin Octopus' tentacles. Putie is using this one as a weapon.
And he is reneging on a valid and standing contract.
I hope Europe wakes up before its too late.
In my opinion Putin with this move is doing Ukraine a favour making Russian-Ukrainian relations more down to earth and not based on some "brotherly nations" BS of USSR era. In truth Ukrainians and Russians never been brothers. Ukraine has been tool of Russia since Chmielnicki's times. Independent Ukraine is notion not known in the course of Russian history. No wonder when it eventually turned up it brings constant frictions. But present situation is even more complex because it touches the very concept of being a Ukrainian based on demographic/cultural/language differences. I see some similiarities between the situation in Ukraine and the situation in pre-war Poland where cultural differences and minority puzzle contributed greatly to state's fragility. Now Ukraine is kept captive because of large Russian minority living there. Nationalism in West Ukraine where beats the county's heart is very fervent so market prices for gas would be something people there could handle for the price od sovereignity. But the same wouldn't happen in russified East. But all in all what can Russia do? Declare a war? Baltic pipeline is in the mist and Poland, second transit country supports Ukrainian Oranges wholeheartedly to balance Russian influence in the region. The awkward manner in which Putin's administration deals with the issue will bring plenty political benefits only to the Oranges. And the gap between East and West will deepen. Whether you want it or not it is historic border between Europe and Russian Eurasia. To sum up - now it has been become evident that post-USSR area has yet to decide whether they want to be independent states, act together and search for energetic alternatives to Russian economic pressure. Since Russian interest to influence smaller neighbours, and by these means fight for space within the sphere of European values and culture is and always be a fact.
Get the facts straight - Putie thought he was buying an election last year with the current contract at $50.
Read and Weep Gary, (our Viet Nam Communist Fighting Hero who can only kiss up to the Kremlin now)
If so, then the deal did not go through. Why Russia should pay tens of billions of dollars over the several years for anti-Russian regime?
What are you talking about - Russia is screwing Europe with their pricing -
The market price is far lower - here is the latest - Europe don't need Putie and his stinkin gas.
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