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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

Sunday, Dec. 21


The Zenit St. Petersburg basketball team returns to the northern capital this evening for a matchup with Krasny Oktyabr, a Volgograd-based basketball club. Tickets for the game, which tips off at 6 p.m. this evening, can be purchased on the clubs website or at their arena, Sibur Arena, on Krestovsky island.


Satisfy your sugar cravings during Sweet New Year, an ongoing seasonal festival at the Raduga shopping center. Each weekend of December will welcome hungry visitors to taste hundreds of different kinds of desserts. Workshops are open to visitors and seasonal gifts can also be purchased for those rushing to finish their New Year shopping.



Monday, Dec. 22


Pick out the latest fashions as holiday gifts for loved ones or as early presents for yourself during the Christmas Design Sale at Kraft on Obvodny Kanal, starting on Dec. 20 and continuing through Dec. 27. Designer clothes will be on sale every day of the week or you can buy something more festive to decorate the home while sipping on hot coffee and perusing the various master classes.



Tuesday, Dec. 23


Meet Arctic explorers Fedor Konukhov and Viktor Simonov during SPIBAs and Capital Legal Services event Arctic Expedition this morning in the Mertens House business center at 21 Nevsky Prospekt. The meeting will discuss the explorers ongoing eco-social project and how companies can use the project as a unique marketing opportunity. Email office@spiba.ru by Dec. 22 if you wish to attend.



Wednesday, Dec. 24


The Anglican Church of St. Petersburg we will be holding a Christmas Eve service at 7 p.m. led by Rev Wm. Shepley Curtis of the Episcopal Church. The service will be held at the Swedish Church at 1/3 Malaya Konyushennaya Ulitsa.



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