Gas dispute could hit Western supplies, Russia warns
Western Europe was warned that its supplies of gas could be hit if Russia carries out its threat to cut off fuel to Ukraine on New Year’s Day.
Moscow and Kiev showed no signs of backing down today as the clock ticked towards the deadline for Ukraine to accept a massive price increase for natural gas.
Meanwhile, Europe eyed the stand-off warily amid the warnings that its supplies could be affected.
Gazprom, Russia’s state-owned gas monopoly, is demanding Ukraine pay £130 - more than four times the current price of £30 – per 1,000 cubic meters of gas, vowing to halt supplies tomorrow unless an agreement is reached.
Ukraine wants an increase that would bring what it pays closer to world prices to be phased in gradually. President Viktor Yushchenko said last night that the most it was willing to pay now was £45.
Gazprom has informed European customers in a letter that once it stops deliveries of gas intended for Ukrainian use, supplies to other countries could be restricted if Kiev siphons off gas meant for transit further west, company spokesman Sergei Kupriyanov said.
Gazprom “cannot completely exclude the risk of unsanctioned removal of gas from the transit system by the Ukrainian side”, the letter warned, according to Kupriyanov. He said it guaranteed delivery of all contracted gas as far as the Russian-Ukrainian border.
About 80% of the gas Gazprom sells to the West goes through Ukraine.
Yushchenko’s office said his Cabinet introduced measures that would ensure the unhampered flow of gas into Ukraine and its transit to EU countries until a new contract was signed. But his prime minister has said Ukraine has the right to take 15% of shipments through its territory as transit fees.
EU Energy Commissioner Andris Piebalgs said he was concerned about the Russian threat but was confident an agreement would be reached “and that Russia and Ukraine will honour their commitments to supply European gas markets as they have at all times in the past”.
The EU has called a special meeting of European energy officials for next week to consider any disruption of supplies to Western Europe. Gas importers in European nations said they were watching the dispute closely but were well protected by reserves and alternate sources.
The showdown has underlined the tension boiling between the historically linked, mostly Slavic ex-Soviet republics since the West-leaning Yushchenko - who wants to decrease Moscow’s clout in his country – beat his Russian-backed rival in a bitter electoral battle a year ago.
It threatens to dominate the New Year holiday, a big one in both countries since the Soviet era.
Yushchenko’s latest comments came in a live television interview that served as a New Year’s address and followed a carefully staged televised broadcast in which the head of Gazprom emphasised its plans to shut off the valves on New Year’s Day.
“The actions will be precise and resolute,” said Alexei Miller, speaking with the swinging pendulum of a grandfather clock in the background. He repeated grimly that Russia would halt supplies to Ukraine at 10am (7am GMT) tomorrow unless a new contract was signed.
With no sign of progress towards a deal, Yushchenko proposed earlier yesterday that Russian president Vladimir Putin order both countries’ companies to sign a contract in the first 10 days of January, freezing prices until then, Yushchenko’s office said.
Putin’s press service said the Kremlin had not received the telegram containing the proposal and there was no reaction from the Russian leader. But Gazprom criticised the plan, saying accepting it could lead to indefinite delays.
Russia, a major supplier to the European Union and intending to make international energy security a theme of its leadership from January 1 of the G8 nations, also moved in advance to put the blame on any dent in supplies to its western clients on its neighbour.
