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Gazprom Threatens To Cut Off Ukraine

Published: March 12, 2014 (Issue # 1801)



  • Gazprom remains the EUs dominant gas supplier, supplying about a quarter of its gas consumption, however only about 50 percent of this gas transits Ukraine.
    Photo: Sergey Porter / Vedomosti

Gazprom has threatened to cut off gas supplies to Ukraine unless overdue gas bills are paid. On Mar. 7, the deadline for payment of Februarys gas supplied to Ukraine, Gazprom CEO Alexei Miller said the debt totaled $1.86 billion and issued this warning: Either Ukraine makes good on its debt and pays for current supplies, or there is a risk of returning to the situation of early 2009.

In 2009, the Russian state gas company cut supply to Ukraine for about ten days as a result of a politically-charged pricing dispute. This crisis led to gas shortages in a handful of central and eastern European countries reliant on Russian gas flowing through Ukraine and accelerated European attempts to diversify its gas supply and supply routes.

Since that time, however, much has changed in the gas trade between Russia and the EU. Though Gazprom remains the EUs dominant gas supplier, supplying about a quarter of its gas consumption, only about 50 percent of this gas transits Ukraine, compared to about 80 percent at the time of the 2009 crisis.

EU Energy Commissioner Guenther Oettinger pointed out that EU countries are now required to have a months worth of gas in storage and that these storage containers are relatively full due to this years mild winter, Reuters reported.

Were in a much better position than we were five years ago, Guenther said.

The gas trade has been a major point of contention between Russia and Ukraine for many years, but it seemed a mutually agreeable, though delicate, solution had been achieved a few months ago.

Following Ukraines withdrawal from the Association Agreement with the EU in December that sparked the initial protests in Kiev, Putin and Yanukovych struck a deal that saw Gazprom granting Ukraines state energy company, Naftogaz, a significant gas price discount. The deal, which lowered prices from around $400 per thousand cubic meters to $268.5, was to be renegotiated every three months.

On Mar. 4, with the first three months of the agreement coming to a close, Gazprom decided not to renew the discount.

During a meeting between Gazprom chief Alexei Miller and Russian Prime Minister Dmitry Medvedev, it was announced that starting April, Gazprom would raise gas prices back up to the levels in the existing contract, the same contract that Yulia Tymoshenko had signed in 2009 and resulted in her imprisonment.

Putin, during a news conference on the same day, claimed the decision to raise prices was motivated by economics, not politics. They failed to pay off the debt, I think its $1.5 billion as of today and if they dont pay for February its going to be $2 billion. So if you dont pay, then lets go back to regular prices. This makes perfect commercial sense. This has nothing to do with the situation in Ukraine.

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ALL ABOUT TOWN

Thursday, July 24


Liliana Modiliani, a well-known Russian stylist, will talk about choosing clothes that fit during her lecture at 7 p.m. at the Pryamoy Efir art club, 13 Viborgskoe Shosse.



Friday, July 25


Discuss Russias economic and political prospects for 2014 during a Business Breakfast organized by SPIBA at 9.30 a.m. in the Bank Saint-Petersburg office at 64


Malookhtinsky Prospekt.


Start your weekend with adorable miniature pigs at the Squealing Pig festival at 7 p.m. this evening in the Karl & Friedrich restaurant, 15 Iozhnaya doroga, on Krestovsky Island.



Saturday, July 26


Hundreds of brand-new and retro cars, drag and drift shows, test drives and karting are planned for the Avtobum-2014 festival, which will take place in front of the RIO shopping center at 2 Fuchika Ulitsa.


Participants in todays SaniDay Summer competition will impress visitors with their hand-made, unusual and hilarious boats, which will race at the Igora Resort near the 54th kilometer on Priozerskoe Shosse.


Metro Family Day will include both serious lectures for adults and master-classes for children, making the event interesting for the whole family. To participate, come to Kirov Park on Yelagin Island.


Photography will be the focus of todays Photosubbota, which features lectures by famous photographers, meetings with photo schools and studio representatives, and participation in a photography competition. The event starts at noon at Petrokongress, 5 Lodeynopolskaya Ulitsa.


If you like cycling, make sure to visit the Za Velogorod Festival with its retro bike exhibition, market and live music. The second round of the Leningrad Criterium race will also take place during the event at Petrovsky Arsenal in Sestroretsk.



Sunday, July 27


Navy Day will be celebrated with a weapon and military transportation exhibition, self-defense master classes and concerts. The event starts at 1 p.m. in the 300th Anniversary Park of St. Petersburg.



Monday, July 28


Dont miss a chance to see the latest achievements in robotics during the RoboDom interactive show, exhibiting more than 150 robots. The show will be at BUM center, 22/2 Gzhatskaya Ulitsa, until Aug. 3. The entrance ticket costs 350 rubles ($10).



Tuesday, July 29


A video of a Queen concert from 1986 will be shown today at 8 p.m. in Yaschik, 50/13 Ligovsky Prospekt.



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