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Page added on May 13, 2014
Ukraine tells Russia not to use natural gas as a “weapon”
Ukrainian Prime Minister Arseny Yatseniuk urged Russia on Tuesday not to use natural gas as a “weapon” against his country, and accused Moscow of seizing tens of billions of dollars’ worth of its assets and energy resources in Crimea.
Russian energy giant Gazprom earlier demanded a $1.66 billion (985 million pounds) pre-payment from Kiev for June gas deliveries, saying Ukraine had only half its requirements in storage to ensure a trouble-free winter.
“We are ready for a market-based approach and Russia is to stop using natural gas as another, or a new type of Russian weapon,” Yatseniuk told a news conference with European Commission President Jose Manuel Barroso in Brussels.
Ukraine wants to change the conditions of a 2009 contract that locked Kiev into buying a set volume of gas, whether it needs it or not, at $485 per 1,000 cubic metres – the highest price paid by any client in Europe.
Moscow dropped the price to $268.5 after then-President Viktor Yanukovich turned his back on a trade and association agreement with the European Union last year, but reinstated the original price after he was ousted in February.
Kiev has so far refused to pay the higher price, saying gas is being used as a political tool by Moscow to punish Ukraine’s new leaders for moving closer to the EU.
Yatseniuk said Ukraine was ready to pay its arrears for Russian gas within 10 days if state-controlled Gazprom agreed to sell it at $268 per 1,000 cubic metres.
But he repeated a threat to take Gazprom to an arbitration court in Stockholm if the two sides failed to agree on a price by May 28, and said he was making a “final call” to Russia to sit down and negotiate a solution to the gas dispute.
Yatseniuk accused Russia of seizing Ukrainian property worth tens or even hundreds of billions of dollars, including Crimean gas company Chernomorneftegaz, when it annexed the region in March.
“They have stolen more than 2 billion cubic metres of Ukrainian natural gas. They’ve stolen our fields, they have stolen our companies, they have stolen our onshore and offshore drills. We will see Russia in court too,” he said.
3 Comments on "Ukraine tells Russia not to use natural gas as a “weapon”"
rockman on Tue, 13th May 2014 9:00 pm
Interesting that the prepayment monies Russia has demanded is almost exactly the amount the EU offered to the Ukraine yesterday. The Ukraine certainly understands the power of restricting NG supplies as political leverage. The arbitration court in Stockholm agreed with the Russians that the Ukraine was being naughty along those lines in the recent past:
A serious dispute began in March 2005 over the price of natural gas supplied and the cost of transit. During this conflict, Russia claimed Ukraine was not paying for gas, but diverting that which was intended to be exported to the EU from the pipelines. Ukrainian officials at first denied the accusation,but later Naftohaz admitted that natural gas intended for other European countries was retained and used for domestic needs. The dispute reached a crescendo on 1 January 2006, when Russia cut off all gas supplies passing through Ukrainian territory.[4] On 4 January 2006, a preliminary agreement between Russia and Ukraine was achieved, and the supply was restored. The situation calmed until October 2007 when new disputes began over Ukrainian gas debts. This led to reduction of gas supplies in March 2008. During the last months of 2008, relations once again became tense when Ukraine and Russia could not agree on the debts owed by Ukraine.
In January 2009, this disagreement resulted in supply disruptions in many European nations, with eighteen European countries reporting major drops in or complete cut-offs of their gas supplies transported through Ukraine from Russia. In September 2009 officials from both countries stated they felt the situation was under control and that there would be no more conflicts over the topic, at least until the Ukrainian 2010 presidential elections. However, in October 2009, another disagreement arose about the amount of gas Ukraine would import from Russia in 2010. Ukraine intended to import less gas in 2010 as a result of reduced industry needs because of its economic recession; however, Gazprom insisted that Ukraine fulfill its contractual obligations and purchase the previously agreed upon quantities of gas.
On June 8, 2010, a Stockholm court of arbitration ruled Naftohaz of Ukraine must return 430 billion cubic feet of gas to RosUkrEnergo, a Swiss-based company in which Gazprom controls a 50% stake. Russia accused Ukrainian side of siphoning gas from pipelines passing through Ukraine in 2009.
dissident on Tue, 13th May 2014 9:09 pm
Ukraine should stop blackmailing Russia which ships over half of its gas sales to the EU via Ukrainian pipes. Ukraine claims $285 per thousand cubic meters is a proper price. Norway does not sell for such a price and neither does Russia. Even at $500 per thousand cubic meters, natural gas is still cheaper than oil on a per BTU basis. That’s a stupid discount since natural gas can be used for transport, for chemical manufacturing and for fertilizer production.
Makati1 on Wed, 14th May 2014 8:50 am
Even in the US, deadbeats that don’t pay their gas bills get cut off…