Ukraine wants up to $US 1 billion worth of gas to resume transit
Ukraine’s Naftogaz has requested Gazprom to hand over 21 million cubic metres of gas daily if the Russian company wants transit to Europe resumed, RT’s sources in Ukraine say. In this quarter alone the demanded gas would cost up to $US 1 billion.
Naftogaz has sent a draft agreement to Gazprom that would amend the contract between them. The clause says the Russian company would provide the so-called process gas that is used to power compressor stations that pump the fuel through the pipelines.
The current contract makes Ukraine responsible for the supply of process gas, just like other transit countries like Belarus or Bulgaria do to fulfill their obligations. Ukraine claims Russia should be the party responsible for supplying the gas.
The Ukrainian proposition suggests that Gazprom provides 360 million cubic metres of gas in January and 600 million cubic metres in February and March. According to Naftogaz, it will ‘secure proper transit of the Russian natural gas to European consumers’.
The cost of the gas which Ukraine demands in January alone is about $US 160 million in market prices.
By David Jolly
Wednesday, January 14, 2009
Wednesday, January 14, 2009
PARIS: European leaders were struggling Wednesday for a means of applying leverage to Ukraine and Russia as the natural gas crisis that had left millions of homes without heating fuel continued for an eighth day.
After saying last week that Europe was prepared to take the crisis to the highest diplomatic levels, the European Commission president, José Manuel Barroso, called the situation "both unacceptable and incredible," but he offered little in the way of carrot or stick.
"I would like to convey a very clear message to Moscow and Kiev," Barroso said in an address to the European Parliament in Strasbourg. "If the agreement sponsored by the European Union is not honored as a matter of urgency, I will advise European companies to take this matter to the courts and call on member states to engage in a concerted action to find alternative ways of energy supply and transit."
A failure to honor the accord signed Monday, he added, would mean that "Russia and Ukraine can no longer be considered reliable partners for the EU in matters of energy supply."
In Moscow the Russian president, Dmitri Medvedev, called for a summit meeting Saturday of European, Russian and Ukrainian leaders to work out a deal. Reuters quoted the Ukrainian president, Viktor Yushchenko, as saying that while such a meeting was a good idea, it should not be held in Moscow.
While the underlying cause of the crisis is a breakdown in negotiations on the price Ukraine will pay for its own supplies of Russian gas, the Monday accord foundered Tuesday over the question of who would provide the so-called technical gas needed to operate the Ukrainian compressor stations that push the gas through the pipeline network. The Ukrainian prime minister, Yulia Tymoshenko, called on Russia again Wednesday to provide the technical gas itself.
Russian officials, who said Gazprom had lost about $1.2 billion as a result of the conflict, sought to place the blame on Ukraine.
"No transit country has the right to abuse its transit status or gamble on it to hold consumers in Europe hostage," Prime Minister Vladimir Putin said in a meeting with the prime ministers of Bulgaria, Slovakia and Moldova. Despite historically close ties with Moscow, the three countries and the former Yugoslavia have been among the hardest hit since Russia shut off the valves last week. Putin also said the European Union "could do more" to reach a deal by putting pressure on Ukraine.
The prime ministers refrained from assigning blame, instead calling on both sides to quickly reach an agreement and resume the flow of gas.
"We do not want to determine who is right and who is guilty because the bilateral disagreement with Ukraine does not interest us," Robert Fico, the Slovakian prime minister, told Putin, adding that European leaders were also putting pressure on Ukraine. "I am here to find a concrete solution for Slovakia," he said, according to a Russian translation of his remarks on the Russian government Web site.
Gazprom offered a swap deal Wednesday to ease the pressure on Slovakia, in which it would send gas to Ukraine and have Ukraine pump an equivalent amount to Slovakia from its own stores. However, such a deal would not work for Bulgaria, it said, because it lacked underground storage facilities there.
The Bulgarian prime minister, Sergei Stanishev, told Putin that "millions of Europeans feel like hostages and are truly suffering. "
Energy analysts, who declined to be quoted, said that in reality there was little the Europeans could do in the short term to end the standoff. Barroso's suggestion that companies might pursue legal action struck many as a weak threat.
For its part Gazprom, the world's largest gas company, has important business relationships with numerous European gas companies, a fact that could temper their enthusiasm for seeking redress in court.
Gazprom said Tuesday that it had notified European customers that it was declaring force majeure gas exports through Ukraine. Force majeure is a contractual clause covering extraordinary circumstances, often referred to as "acts of God," under which a company seeks to avoid penalty for failing to meet its obligations.
Analysts said that the shock of the midwinter halt to Russian gas exports via Ukraine had caused widespread unease in EU circles and could lead to a wholesale reassessment of Europe's dependence on Russian energy sources.
The collapse Tuesday of the monitoring agreement between the European Union, Ukraine and Russia dashed hopes that supplies via the Ukrainian transit network could be restored without a resolution of the pricing dispute at the heart of the crisis. The monitoring arrangement, which put inspectors on site at key points along the Russian export network, fell apart when Russia delivered a small fraction of the expected supply, and Russian and Ukrainian officials claimed the other side had shown bad faith.
Michael Schwirtz contributed from Moscow.
After saying last week that Europe was prepared to take the crisis to the highest diplomatic levels, the European Commission president, José Manuel Barroso, called the situation "both unacceptable and incredible," but he offered little in the way of carrot or stick.
"I would like to convey a very clear message to Moscow and Kiev," Barroso said in an address to the European Parliament in Strasbourg. "If the agreement sponsored by the European Union is not honored as a matter of urgency, I will advise European companies to take this matter to the courts and call on member states to engage in a concerted action to find alternative ways of energy supply and transit."
A failure to honor the accord signed Monday, he added, would mean that "Russia and Ukraine can no longer be considered reliable partners for the EU in matters of energy supply."
In Moscow the Russian president, Dmitri Medvedev, called for a summit meeting Saturday of European, Russian and Ukrainian leaders to work out a deal. Reuters quoted the Ukrainian president, Viktor Yushchenko, as saying that while such a meeting was a good idea, it should not be held in Moscow.
While the underlying cause of the crisis is a breakdown in negotiations on the price Ukraine will pay for its own supplies of Russian gas, the Monday accord foundered Tuesday over the question of who would provide the so-called technical gas needed to operate the Ukrainian compressor stations that push the gas through the pipeline network. The Ukrainian prime minister, Yulia Tymoshenko, called on Russia again Wednesday to provide the technical gas itself.
Russian officials, who said Gazprom had lost about $1.2 billion as a result of the conflict, sought to place the blame on Ukraine.
"No transit country has the right to abuse its transit status or gamble on it to hold consumers in Europe hostage," Prime Minister Vladimir Putin said in a meeting with the prime ministers of Bulgaria, Slovakia and Moldova. Despite historically close ties with Moscow, the three countries and the former Yugoslavia have been among the hardest hit since Russia shut off the valves last week. Putin also said the European Union "could do more" to reach a deal by putting pressure on Ukraine.
The prime ministers refrained from assigning blame, instead calling on both sides to quickly reach an agreement and resume the flow of gas.
"We do not want to determine who is right and who is guilty because the bilateral disagreement with Ukraine does not interest us," Robert Fico, the Slovakian prime minister, told Putin, adding that European leaders were also putting pressure on Ukraine. "I am here to find a concrete solution for Slovakia," he said, according to a Russian translation of his remarks on the Russian government Web site.
Gazprom offered a swap deal Wednesday to ease the pressure on Slovakia, in which it would send gas to Ukraine and have Ukraine pump an equivalent amount to Slovakia from its own stores. However, such a deal would not work for Bulgaria, it said, because it lacked underground storage facilities there.
The Bulgarian prime minister, Sergei Stanishev, told Putin that "millions of Europeans feel like hostages and are truly suffering. "
Energy analysts, who declined to be quoted, said that in reality there was little the Europeans could do in the short term to end the standoff. Barroso's suggestion that companies might pursue legal action struck many as a weak threat.
For its part Gazprom, the world's largest gas company, has important business relationships with numerous European gas companies, a fact that could temper their enthusiasm for seeking redress in court.
Gazprom said Tuesday that it had notified European customers that it was declaring force majeure gas exports through Ukraine. Force majeure is a contractual clause covering extraordinary circumstances, often referred to as "acts of God," under which a company seeks to avoid penalty for failing to meet its obligations.
Analysts said that the shock of the midwinter halt to Russian gas exports via Ukraine had caused widespread unease in EU circles and could lead to a wholesale reassessment of Europe's dependence on Russian energy sources.
The collapse Tuesday of the monitoring agreement between the European Union, Ukraine and Russia dashed hopes that supplies via the Ukrainian transit network could be restored without a resolution of the pricing dispute at the heart of the crisis. The monitoring arrangement, which put inspectors on site at key points along the Russian export network, fell apart when Russia delivered a small fraction of the expected supply, and Russian and Ukrainian officials claimed the other side had shown bad faith.
Michael Schwirtz contributed from Moscow.
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