Russian-EU gas talks have progressed, but no solution was reached Friday over Russia and Ukraine’s gas standoff. Moscow says their $100 gas discount to Kiev stands, and the EU doesn’t want gas negotiations to be used to escalate the Ukraine crisis.
The gas situation is
‘critical’ Russia’s Energy Minister Aleksandr Novak said after
meeting with EU energy chief Gunther Oettinger in Moscow on
Friday. The minister expressed concern about Ukraine’s
preparations for the winter months as gas supplies dwindle, and
warned Kiev might siphon off Europe-bound deliveries.
Russia said the will resume gas deliveries to Ukraine if they pay
$1.45 billion of their gas debt, Aleksey Miller, CEO of Gazprom,
said. Naftogaz, Ukraine’s national oil and gas company, has a
total debt of $5.3 billion.
Russia again offered
Kiev a $100 gas price discount, bringing the total price down to
$385 per 1,000 cubic meters, a lower price it charges any of its
European customers. However, before Gazprom can offer the
discount, Kiev has to begin repaying their debt.
In June, Gazprom switched
Ukraine to a prepayment system after Kiev refused to pay its
billion dollar debt
or agree to price negotiations. Russian gas still flows through
Ukraine to Europe, but Kiev cannot take any gas they don’t pay
for up front.
In previous gas
disputes, Russia has accused Ukraine of stealing gas.
Ukraine will likely run out of natural gas supplies before
winter, as the country only has about 15 billion cubic meters in
storage. Already, the government had to order a 30 percent cut in
gas consumption to save up.
If Ukraine cuts off Russian gas transit, it would hit Europe,
which sources 15 percent of its energy from Russia. Gazprom is
working on strategies to deliver gas without Ukraine. Nord
Stream, a set of twin pipelines that run under the Baltic Sea,
began sending Russian gas directly to Germany in 2011. The pipe
has a 55 billion cubic meter capacity.
Russia is also planning on completing a similar project for
southern Europe, called South Stream.
The country is Europe’s main energy source, supplying 30 percent
of its natural gas. The
most important transit pipeline between Russia and Europe is the
4,451 km ‘Brotherhood’ pipeline which stretches across Ukraine
into Slovakia, and in 2013 delivered more than 50 billion cubic
meters to Europe.
In the winters of 2006 and 2009, similar gas rows between Moscow
and Kiev led Russia to cut off gas to Ukraine.
Ukraine imports nearly 50 percent of its gas from Russia, which
in 2013 amounted to 27.7 billion cubic meters.
Earlier this week Ukraine’s Prime Minister Arseniy Yatsenyuk
claimed that Russia has a master plan to stop gas traveling
through Ukraine to Europe in the winter months, which Novak later
refuted as “groundless.”
Both countries plan on taking separate cases to the Stockholm
arbitration court. Gazprom wants to recover its $5.3 billion in
debt and Ukraine is seeking a $6 billion sum for ‘unfair’ gas
prices and asking the court to review prices that were agreed on
in 2010 under then-Prime Minister Yulia Tymoshenko.
Article source: http://rt.com/business/183596-ukraine-gas-novak-oettinger/
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