IDADI YA WATU WALIOSOMA HABARI HII:

Jan 7, 2009

January 7, 2009, 8:47

Gas cuts hit much of Europe

Several countries in Eastern Europe have had their deliveries of gas through Ukraine cut off, a situation which the EU describes as "unacceptable". Gazprom says Ukraine's energy company has shut off a number of pipelines. Meanwhile, the head of Naftogaz has announced he is ready to resume negotiations. On Tuesday head of Ukraine’s state-run Naftogaz, Oleg Dubina, said he would visit Moscow on January 8 to resume negotiations on gas supplies. Gazprom’s spokesman Sergey Kupriyanov said he was surprised that Naftogaz didn’t want to restart talks immediately. ”Considering that the situation is critical, we are ready to start talks any minute.” The previous talks ended in failure on December 31, prompting Gazprom to shut down gas deliveries to its neighbour. Russia’s energy giant has made efforts to boost gas deliveries to Europe via alternative pipelines. On Tuesday, Bulgaria, Turkey, Macedonia and Greece reported a complete halt in deliveries. Romania claimed it lost almost 75 per cent of its gas, while Austria and Germany also reported a fall-off in supplies. According to the Bulgarian Energy Ministry, the drop in pressure came about when a Ukrainian compressor station stopped working. European Commission Spokesperson Johannes Laitenberger said the “situation is completely unacceptable.” “Without prior warning and in clear contradiction with the reassurances given by the highest Russian and Ukrainian authorities to the EU, gas supplies to some EU member states have been substantially cut.” Speaking at a news conference in London, Gazprom's Deputy CEO Aleksandr Medvedev said: “We are facing this challenge together with our European partners. Actually, we became hostages of the irresponsible behaviour of the transit country through which 80 per cent of our [gas] export goes to Europe. It’s not even a question of a commercial dispute. It’s a question of absolute irresponsibility in handling the export flow of natural gas via Ukraine.” Earlier, Gazprom had accused Kiev of illegally siphoning off Russian gas destined for Europe – something Ukraine has denied. Miller said supplies through Ukraine would be cut by the amount allegedly stolen by Naftagaz - around 65 million cubic meters. However, during the day a far more serious cutback was reported: more than three times this amount. According to Gazprom, Ukraine shut down three out of four of its stations, responsible for bringing Russian gas to Europe. But Kiev denies that it's at fault. Oleg Dubina said: “Presently, we've added 14 million cubic metres to support the system to provide gas exports to Europe. All statements about Ukraine's unauthorised blockage of the gas flow to Europe are false as well as statements that we don't accept Russian gas at the moment and that we don't provide transit.” The head of Naftogaz believes that there's a possibility the Russian company will cut its transit through Ukraine completely. It remains unclear whether Gazprom would or could cut Ukraine out of the picture while maintaining normal gas supplies to western Europe. The vast majority of Russian gas pumped to Europe passes through Ukrainian pipelines. But according to Gazprom company spokesperson, Sergey Kupriyanov, Europe has nothing to worry about, as the gas giant will find alternative supply routes. “To prevent any illegal actions by Ukraine's Naftogaz, gas deliveries towards Ukraine have been cut. We are taking additional steps to meet the needs of our European consumers. Additional gas deliveries come through Belarus via the Blue Stream pipeline, and we also use our reserves in Europe's underground storages,” he said. Meanwhile, the European Union which previously voiced its intention not to intervene in what it said was a commercial dispute, has sent a delegation to Kiev. Although they have made little headway so far, the EU is urging the two companies to deal with the matter sooner rather than later. The previous gas dispute between Moscow and Kiev in 2006 was resolved four days into New Year. The problem recurs annually around New Year’s Eve. The previous gas dispute between Moscow and Kiev in 2006 was resolved four days into New Year. The stand-off has become an annual event, with officials, academics and journalists playing a guessing game as to how long it will last. Gazprom says Ukraine is refusing to settle its debt and pay market prices for its gas. And when supplies are cut off, it resorts to siphoning off product earmarked for Europe. The only things that change in the annual spat are the excuses put forward by Kiev. This year it’s contracts, which are suddenly deemed ‘not effective’. A Ukrainian court has even forbidden the transit of gas through the country, but Gazprom says that decision carries no legal weight. According to Gazprom spokesman Sergey Kupriyanov, this decision is totally illegitimate, because the transit relations of Gazprom and Naftogaz, its Ukrainian counterpart, are regulated by Swedish law. And these issues can be settled only at the Arbitration Institute of the Stockholm Chamber of Commerce.