IDADI YA WATU WALIOSOMA HABARI HII: January 2, 2009, 18:15

Ukraine steals European gas

Ukraine has started siphoning off Russian gas bound for European customers. This follows the cutoff of gas supplies to Ukraine on January 1, after the two countries’ gas giants failed to agree on a price for 2009.

“The Ukrainian side has openly admitted to stealing transit gas destined for Europe. Naftogaz officials are avoiding negotiations with Gazprom. However, they have promised to pay $US 1.5 billion by January 11, but there will still be an outstanding debt of $US 614 million. Therefore, we plan to increase the transit level of gas through Belarus,” said Sergey Kupriyanov, spokesman for Russian energy company Gazprom. Also, according to Russia’s Deputy Foreign Minister Aleksandr Grushko, Russia has asked the EU parliament to hold a special meeting to discuss the issue of Russian gas transits via Ukraine. “Gazprom representatives are ready to head to Brussels, and all European countries, to fully inform them about the dispute between Gazprom and Ukraine's Naftogaz,” he said. Earlier Gazprom spokesman Sergey Kupriyanov said that independent auditors are being blocked from checking whether gas supplies to Europe are being hindered. "We don't have an effective gas delivery contract with Naftogaz now. Naftogaz is currently obstructing the operators of RosUkrEnergo and is not letting them extract the gas from underground facilities which they have," said Kupriyanov. There is still no contract signed between the two countries and debts must be paid in full before another can be signed. The Russian energy company has also calculated over $US 600 million in penalties Ukraine owes. Gazprom’s overall supply reduction amounted to 90 million cubic metres a day, which is roughly Ukraine’s consumption. Prices don’t meet Both Ukrainian President Viktor Yushchenko and Prime Minister Yulia Timoshenko have appealed to Russia not to cut gas supplies to the country and to continue talks. They've also named the price their country is prepared to pay for the gas: $US 201 per 1,000 cubic metres. Gazprom, though, wanted a higher price - $US 250 per 1,000 cubic metres – which is almost half the market price. Ukraine turned down this offer. A statement by Gazprom followed that it would now sell gas to Ukraine at the market price of $US 418. “Ukraine didn't accept the preferable gas price we offered - which was $US 250 per 1,000 cubic metres," said Gazprom CEO Aleksey Miller. "So starting from January 2009, Gazprom will deliver gas to Ukraine at a market European price." As Europe depends on Russia for about a quarter of its gas supplies, and the fact that 80% of their supplies pass through Ukrainian pipelines, it is watching the ongoing conflict closely. After Russia had announced a new gas price for Ukraine, Viktor Yushchenko said it would be "logical" that transit costs should go up too. The Ukrainian leader said that talks with Russia are to be resumed shortly with the final agreement to be reached by the time of the Orthodox Christmas, January 7. A Ukrainian delegation has set off on a tour of Europe, which aims at informing the European Union about the gas situation and to provide guarantees that the gas will be transported across Ukraine as normal. Also, Ukraine's president Yushchenko has sent letters to the leaders of eight countries and to the European Commission to explain his reasons of the gas dispute. Earlier Ukraine had threatened to confiscate Russian gas passing through the country, refusing to guarantee supplies to Europe as Russia promises to stop gas supplies to Ukraine due to debts. Gazprom called Ukraine’s reaction ‘blackmail’.