Russia shuts off gas to Ukraine

[Shiloh]

Source: http://news.bbc.co.uk/2/hi/europe/7806870.stm

Russia shuts off gas to Ukraine
Russia has stopped all gas supplies to Ukraine after the collapse of talks to end a row over unpaid bills and prices.

Russia's gas giant Gazprom said it turned off the taps at 0700 GMT, when its contract to supply Ukraine ended.

Ukraine insists it has paid off its debts to Gazprom, but Russia contests this. The two countries have also failed to agree on a price for 2009.

The EU urged Russia and Ukraine to resume negotiations and not to let the dispute disrupt supplies to Europe.

A similar row between Gazprom and Ukraine at the beginning of 2006 led to gas shortages in several EU countries.

Pipes across Ukraine carry about a fifth of the EU's gas needs.

The new holders of the EU presidency, the Czech Republic, urged the parties to "rapidly reach a successful outcome" to their dispute.

"All existing commitments to supply and transit must be honoured," it added.

Both Russia and Ukraine insist that gas supplies transported via Ukraine to the European Union will continue as normal.

An official at Gazprom's headquarters in Moscow said: "We have fully cut off supplies to Ukraine as of 10am (0700 GMT) today."

"Usually we supply 390 million cubic metres per day, of which 300 million is transit gas for Europe. Today supplies are running at 300 million cubic metres. We continue supplying Europe in full," Reuters quoted him as saying.

Ukraine's state energy firm Naftogaz confirmed that supplies had dropped off steadily, and said it would start pumping gas from its reserves.

Ukraine says it has built up enough reserves to see it through the next few months.

'Eager for conflict'

"The debt to Gazprom for gas supplied earlier was not paid. Despite verbal statements from Kiev, Gazprom did not see any money in its account," said Gazprom's chief executive Alexei Miller said.

He criticised Ukraine's stance during the negotiations as "unconstructive", and said Gazprom had no legal reason to continue supplying gas to Ukraine.

Mr Miller said the contract to supply gas depended on the full settlement of ?2bn in gas bills and late-payment fines levied by Gazprom.

He also suggested that Kiev was seeking to provoke a wider dispute, saying he was "forming the impression that there are political forces in Ukraine which are very eager to see a gas conflict between our two countries".

Naftogaz said it has paid $1.5bn (?1bn) in outstanding bills to RosUkrEnergo - a Switzerland-registered gas trading company which is acting as an intermediary - but not the fines imposed by Gazprom.

Gazprom is the world's largest gas producer and supplies a quarter of the European Union's gas needs - and 42% of its imports. Most of that is transported via Ukraine.

Russia's Vladimir Putin had earlier warned Ukraine not to disrupt the transit of gas to Europe.

He warned of "very severe consequences" for Ukraine in terms of its relations with both Russia and European countries.

Mr Putin said Gazprom had been generous in offering Ukraine a price of $250 per 1,000 cubic metres of gas in 2009, given that the price in Europe was currently more than $500.

He said he understood that Ukraine was in "a difficult economic situation" which was worse than Russia's, but put the dispute down to a "war of the clans" between the Ukrainian Prime Minister, Yulia Tymoshenko, and President Viktor Yushchenko.

 

[Shiloh]

Re: Russia shuts off gas to Ukraine

Source: http://www.ctv.ca/servlet/ArticleNe...106/Russia_gas_090106/20090106?hub=TopStories

Natural gas shortages slam some European nations

Updated Tue. Jan. 6 2009 12:07 PM ET

The Associated Press

KYIV, Ukraine -- A natural gas crisis loomed over Europe on Tuesday, as a contract dispute between Russia and Ukraine shut off Russian gas supplies to six countries and reduced gas deliveries to several others.

At least two Bulgarian cities were totally without gas, and nations like Turkey were turning to Iran to bolster their supplies.

In a sharp turnaround, the European Union blasted Russia and Ukraine, saying the sudden cutoff to some of its member countries was "completely unacceptable." Just a day ago, the EU was trying to downplay any problems from the gas dispute.

In response, Russia and Ukraine agreed to hold new talks on the contract dispute over Russian natural gas that travels to Europe through Ukraine's pipelines. The two neighbors are locked in a dispute over pricing and overdue payments. Russia cut off supplies to Ukraine on Jan. 1 but had promised to keep gas moving to Europe.

The head of the Ukrainian gas company Naftogaz, Oleh Dubina, said he would travel to Moscow on Thursday for new talks. He made the decision after speaking to Alexei Miller, chief executive of Gazprom, Russia's state-controlled monopoly gas supplier.

"Given the crisis situation, we are ready to start talks at any moment," said Gazprom spokesman Sergei Kupriyanov.

Wednesday is Orthodox Christmas, a holiday in both Russia and Ukraine.

The energy dispute sharply escalated Tuesday when six countries on the other end of the pipeline network running from Russia through Ukraine reported a complete shutoff. Russia supplies Europe with about a quarter of its gas, 80 percent of which is shipped through Ukraine.

Bulgaria, Greece, Macedonia, Romania, Croatia and Turkey all reported a halt in gas shipments. Croatia said it was temporarily reducing supplies to industrial customers and urged consumers to use gas sparingly in their homes. Bulgaria said it had enough gas for only "for a few days."

Bulgaria's President Georgi Parvanov said the country could start immediate preparations to relaunch Unit 3 of its Kozlodui nuclear power plant. The aging two 440-megawatt reactors were shut down two years ago, and Parvanov said one of them could be opened within a month.

Two cities in eastern Bulgaria, Varna and Dobrich, were left with no natural gas supplies on Tuesday. In Varna, on the Black Sea coast, the shortage left 12,000 households without central heating amid freezing temperatures.

Turkey's Energy Minister Hilmi Guler confirmed the gas cutoff and said the country was trying to compensate with supplies from other sources including another Russian pipeline beneath the Black Sea.

During a similar dispute between Ukraine and Russia in 2006, which lasted just three days, several West European countries saw their gas supplies drop by 30 percent or more. That crisis led to criticism of Russia as an unreliable energy partner and spurred talk of finding ways to diversify Europe's energy supply.

Up to Monday, the EU has said that the dispute would not affect consumers in the coming weeks. The sudden drops Tuesday, however, increased the diplomatic pressure to find a solution.

In a strongly worded statement, the EU complained that gas had been cut "without prior warning and in clear contradiction with the reassurances given by the highest Russian and Ukrainian authorities to the European Union."

Other countries lost significant amounts of gas as well. Austria lost 90 percent of its normal Russian gas supplies on Tuesday -- about half its total supply. It said it had three months' gas reserves but called an emergency meeting at its Economy Ministry.

In Slovakia, gas importer SPP AS was considering declaring a state of emergency Tuesday after its gas deliveries from Russia were down by 70 percent.

The Czech Republic and Hungary also reported significant supply drops. The Czech gas company RWE Transgas said it expects only 25 percent of its normal supplies Tuesday from Russia, while Hungary predicted its cut would be greater than the 20 percent it saw on Monday.

Moscow and Kiev, meanwhile, blamed each other. Naftogaz said Gazprom had sharply reduced its shipments to Europe through pipelines crossing Ukraine, triggering the cuts. Gazprom accused Ukraine of stealing gas shipments intended for other nations.

Kiev denied it was stealing Russian gas. It said was using some of its own gas as fuel to transport the rest of the Russian gas to Europe. Naftogaz says Gazprom is obliged to provide this gas but is refusing.

Gazprom said it was sure it could provide Europe with enough gas.

"We are confident that we will be able to get through this situation without any damage to the gas production and transit system," deputy chairman Alexander Medvedev was quoted as saying by RIA-Novosti. "The only issue is gas transit to Europe through Ukraine."

On Monday Gazprom said it would cut the amount of gas it ships to Europe through Ukraine by 65.3 million cubic meters, or about 20 percent -- the amount it accuses Ukraine of diverting from its transit pipeline network over recent days.

Poland was considering limits on deliveries to heavy industry, even though so far Russia has compensated for shortfalls through Ukraine by shipping extra gas to Poland through a pipeline in Belarus.

 

[Shiloh]

Re: Russia shuts off gas to Ukraine

Source: http://news.bbc.co.uk/2/hi/europe/7826142.stm

Page last updated at 16:25 GMT, Tuesday, 13 January 2009
Russian gas to Europe 'blocked'

Russian gas giant Gazprom says Ukraine has blocked gas deliveries to Europe, dashing hopes of ending a row which has hit several countries' supplies.

Gazprom deputy head Alexander Medvedev said Ukraine had failed to carry the gas onwards to Europe after it resumed pumping it across their border.

Ukrainian President Viktor Yushchenko called on Russia to "stop the blackmail" and work out an agreement.

Hundreds of thousands of Europeans have been without gas for nearly a week.

Moscow has been unable to resolve differences with Ukraine over debts and pricing.

(Scroll dowm to see map of affected area)

The BBC's Rupert Wingfield-Hayes, at a pumping station on the Russian-Ukrainian border, says the latest twist in the dispute is symptomatic of the total lack of trust between the two countries.

'Limited' supply

European Commission president Jose Manuel Barroso telephoned Russian Prime Minister Vladimir Putin to express disappointment at the low levels of gas flowing from Russia and at the apparent lack of access to dispatch centres for EU monitors, EU officials said.

Mr Barroso said he would also discuss the problem with the Ukrainian leadership.

Russia shut off the gas to Europe last Wednesday, accusing Kiev of stealing gas meant for other European customers.

Ukraine's domestic supply was cut a week earlier.

However, in a deal reached on Monday, Russia agreed to resume supplies if Russian and EU observers were allowed to monitor their transit through Ukraine.

The move was designed to calm Russian fears that Ukraine was siphoning off gas for its own use.

Russia said gas started flowing from the Russian pumping station at Sudzha at 1030 local time (0730 GMT) on Tuesday.

This was later confirmed by EU monitors, although the amount of gas, they said, was "very limited".

Mr Medvedev said Gazprom had informed the European Commission it was unable to supply gas through Ukraine because Kiev had not opened any export pipelines.

"Ukraine didn't open the route for gas transit," he said.

"If the system is closed, we can't provide gas. The Ukrainian side cynically informed us that the gas transport system had been reoriented to domestic consumers.

"We don't know what to do at the moment."
After the gas was switched on at Sudzha, Ukrainian gas company Naftogaz demanded "the immediate resumption of even supply of gas along all transit routes", saying the amount and direction of the gas had not been agreed by the two sides.

Mr Yushchenko, speaking in a televised press conference later on Tuesday, said: "Each person living in Ukraine should understand that what has happened between 1 January and now is not the blackmail of our state, it is the blackmail of each of you."

He went on: "What is most important in these talks now is to bring a halt to the political emotions, stop the blackmail and let experts start working out answers [for transit and supply contracts]."

Major shortages

Russia cut gas supplies to Ukraine on New Year's Day, saying it would pump only enough for customers further down the pipeline.

But then Moscow accused Ukraine of siphoning off gas intended for third countries and it restricted supplies even further.

Ukraine denied the claim, but the flow of Russian gas ceased completely on 7 January, leaving many European countries with major shortages.

The EU gets a quarter of its gas supplies from Russia - 80% of which passes through Ukraine - and more than 15 countries across central Europe have been hit by the shutdown of Russian supplies.

 

[AlaskaDenise]

Re: Russia shuts off gas to Ukraine

This might be a good time to remember the conflict in Georgia was considered by some to be a gas-line power struggle. Europe clearly needs Caspian Sea's russian-free and Turkmenistan's very-cheap gas.

See here for quotes from various sources.

.

 

[mixin]

Pleas but no progress in European gas crisis

Pleas but no progress in European gas crisis

Jan 14, 2:13 PM (ET) By JIM HEINTZ

MOSCOW (AP) - Heated complaints from European leaders failed Wednesday to thaw the deep-rooted economic and political dispute between Russia and Ukraine that has blocked natural gas shipments to much of Europe in the dead of winter.

With the crisis moving into its second week, Moscow and Kiev both held rigidly to allegations that the other country was to blame for upending Europe's winter heating plans. The European Union appeared to have little leverage other than pleading for a restoration of the gas that heats their homes and powers their factories. Even EU threats of a possible wave of lawsuits did not move either nation into action.

In an apparent indication that no resolution is on the horizon, Russian President Dmitry Medvedev proposed European gas-consuming countries send their leaders to Moscow on Saturday for a summit.

The crisis has deepened European concerns about Russia's willingness to use its energy riches as a political tool. It also raised questions about the reliability of Ukraine, whose pro-Western leaders want to join the EU but are mired in dangerous disputes with Russia and intramural rivalries that have nearly paralyzed the government.

About 20 percent of Europe's gas comes from Russia via Ukrainian pipelines. Bulgaria and Slovakia are entirely dependent on Russia for gas and the cutoff that began Jan. 7 has inflicted wide hardships on their people in the middle of a harsh winter.

EU countries had hoped supplies would be restored Tuesday after they brokered a deal sending monitors to keep tabs on the flow of gas. But while Russia's gas monopoly Gazprom resumed some gas supplies, Ukraine did not send the gas on to Europe, saying the route that Gazprom demanded would force Ukraine to halt domestic gas supplies to a large swath of territory.

The same thing happened again Wednesday, said Oleh Dubina, the head of Ukraine's gas company Naftogaz.

"Unfortunately, we answered the same way: we cannot leave our regions without gas," Dubina said.

Putin said it was up to Ukraine to make the deliveries possible.

"We opened the tap, and are ready to supply gas, but on the other side, the tap is closed," Putin told the prime ministers of Bulgaria, Slovakia and Moldova in a meeting at his residence outside Moscow. "Nobody, no transit country, has the right to abuse its transit location to take other customers hostage."

"Millions of Europeans feel like hostages and are truly suffering," said Bulgarian Prime Minister Sergei Stanishev.

Slovakian Prime Minister Robert Fico added that "Ukraine is losing the trust of European partners because of its behavior."

Yushchenko in turn claimed that Russia was trying to drive Ukraine's already-struggling economy into penury by charging unfairly high prices, a strategy he claimed aimed to eventually take control of Ukraine's pipeline network.

Ukraine also claims that Russia has not sent enough so-called "technical gas" to pump the rest of the gas west to Europe. Who should pay for the technical gas is also in dispute.

Russian officials, including Deputy Prime Minister Igor Sechin, are suggesting that Ukraine could use gas from its own reserves to supply Europe, with the promise that Russia would replenish the stocks. But with mistrust high between Kiev and Moscow, and Russia claiming Ukraine still owes gas debts, Ukraine appeared unlikely to take the idea seriously.

The cutoff has forced thousands of businesses in Europe to shut down or cut production.

Serbia reported Wednesday that its power grid was getting overloaded as thousands switched to electric heat and urged residents to conserve energy.

Gazprom chief Alexei Miller reported that the dispute has cost the company $1.1 billion in lost income from the collapse of deliveries to Europe, which prompted the Russian president to say Gazprom should sue Ukraine.

Russia and Gazprom "cannot lose so much money in the current conditions," Medvedev told Miller in televised comments, referring to the global financial crisis.

Russia and Ukraine are deeply at odds over what Ukraine will pay for Russian gas in 2009. Ukraine last year paid $179.50 per 1,000 cubic meters; Russia now wants Ukraine to pay European market price for gas, about $450.

Czech Prime Minister Mirek Topolanek, whose country holds the EU presidency, proposed Wednesday that EU give its "highest priority" to a pipeline that would bypass Russia and deliver Caspian Sea gas via Turkey.

Russia, meanwhile, has used the gas dispute to push for new pipelines to Europe that would bypass Ukraine.

Associated Press Writers Maria Danilova in Kiev, Ukraine, Constant Brand in Strasbourg, France, Monika Scislowska in Wisla, Poland, and Steve Gutterman and Mansur Mirovalev in Moscow contributed to this report.

Full story: http://apnews.myway.com/article/20090114/D95N3KSO0.html