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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, Aug. 28


Learn more about the citys upcoming municipal elections during the presentation of the project Road Map for the Municipal Elections being presented this evening in the conference hall on the third floor of Biblioteka at 21 Nevsky Prospekt. Steve Kaddins, a coordinator for Beautiful St. Petersburg, which gives residents an online forum to lodge complaints about infrastructure problems in the city, will be on hand to answer any questions. The meeting starts at 7 p.m. and is open to all.



Friday, Aug. 29


Park Pobedy will feature the sights and sounds of the world outside of Russia during the Open Art International Festival today. Taste foreign cuisine, learn how to make tea like the Chinese or relax in a hammock during the free event. Although entrance is free, you must register beforehand if you wish to attend.



Saturday, Aug. 30


Break out the tweed and channel your inner Englishman during the English Hunt Picnic this afternoon organized by the Bagmut stables from Krasny Bor in the Leningrad Oblast. Equestrian stunts, English archery and classic hunting fashion will all be available to visitors hoping to live like the characters in Downton Abbey if only for a day. Tickets for the event cost 7,900 rubles ($219.40).


Bookworms will have their chance to swap out well-read classics for something new for their bookshelves at Knigovorot, a free book exchange that will be held in the Yusupov Garden on Sadovaya Ulitsa today. Come for the chance to get a new book or take the opportunity to discuss the literary merits of your favorite authors with fellow fans.



Sunday, Aug. 31


The Neva Delta International Blues Festival wraps up this afternoon on Vasilevsky Island with a concert featuring not only some of Russias best blues bands but international stars as well. Admission is free for all three days of the festival, which begins on Aug. 29, and the shows starting at 5 p.m. each day.



Monday, Sept. 1


Today marks the beginning of Lermontov-Fest, a fall festival celebrating the life of one of Russias most remarkable poets who, in a fate eerily similar to Pushkins, was killed in a duel at the age of 26. Organized by the Lermontov Library System, the next several months will see art exhibitions, concerts and public lectures focusing on the Lermontovs short yet prolific career. Check the Lermontov Library Systems website for more details.



Tuesday, Sept. 2


Join expats and practice your Russian during the Russian Clubs weekly meetings every Tuesday night at 7:30 p.m. The club is free to participate in although you need to be a registered member of Couchsurfing.



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