Russia is Ready to Slash Gas Supplies to Ukraine...

In time of the yesterday’s TV question-and-answer session with the nation, Prime Minister Vladimir Putin declared in the live air that Russia was having a difficult dialogue on the 2009 gas supplies with Ukraine. Putin had agreed with Ukrainian PM Yulia Tymoshenko about the gradual, three-year transfer to the market prices for Russia’s gas, having conditioned it, however, to the settlement of the debt of “over $2.5 billion”.

Ukraine’s Naftogaz that owes over $2 billion to Rosukrenergo has no money even for the first tranche of $550 million. But Ukraine has the four-month stockpile of gas in its underground storage facilities.

People in Rosukrenergo (50-percent owned by Gazprom; intermediary in the gas supplies to Ukraine) said Ukraine had paid off no more than $268.7 million for September supplies, having failed to pay for October-November deliveries ($2,195 million with penalty included). It hasn’t set to December payment ($862.3 million) either.

Ukraine is to get 55 billion cu meters of gas at $179.5 per a thousand cu meters in 2008 despite that Europe’s prices for the relative amount have surged from roughly $270 to $500 since early this year. Gazprom threatened earlier to hike the gas price to above $400 starting from 2009 if Ukraine fails to settle the arrears.

Putin said yesterday he believed there would be no problems with the transit of Russia’s energy resources to key customers in Western Europe. “But if our partners don’t execute these agreements or, as in previous years, illegally siphon off our resources from the transit pipelines, we will have to cut the supplies,” the prime minister warned.

The tricky point is that the threats of Russia’s PM will hardly frighten Ukraine, which has accumulated 28 billion cu meters to 30 billion cu meters of gas in the underground storage facilities, while its annual consumption doesn’t exceed 74 billion cu meters.

Author: Ksenia Kochneva