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Gazprom CEO Alexei Miller, right, follows Naftogaz CEO Oleg Dubina, when going out of Ukrainian President's Secretariat Office in Kiev.
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Dec. 05, 2008
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Ukraine Ready to Winter With No Gas of Russia
Russia may slash gas supplies to Ukraine if Kiev refuses to sign a long-term contract for the transfer to Europe’s formula of gas prices or sets to illegally siphoning off the transit gas destined to Europe. 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.
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”.

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.

The parties negotiated Tuesday and Wednesday. The source familiar with the progress in negotiations said Gazprom granted the payment delay to Naftogaz. Anyway, the monopoly made no threatening statements about the debt. It was Vladimir Putin, who took it upon himself.

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.
www.kommersant.com

All the Article in Russian as of Dec. 05, 2008

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