Russia, Ukraine In EU Talks As Gas Crisis Engulfs Europe

MOSCOW, Russia -- Envoys from Russia and Ukraine go to Brussels on Thursday for emergency EU-brokered talks to resolve a bitter gas fight between the two ex-Soviet giants that has engulfed Europe in a major energy crisis.

Russian Prime Minister Vladimir Putin (L) confers with the chairman of Gazprom, Alexei Miller. Envoys from Russia and Ukraine go to Brussels on Thursday for emergency EU-brokered talks to resolve a bitter gas fight between the two ex-Soviet giants that has engulfed Europe in a major energy crisis.

Announcing the hastily-arranged crisis talks in Prague, European Commission chief Jose Manuel Barroso said the meeting would focus on the use of monitors to verify the flow of Russian gas through Ukraine to clients in Europe.

He said the heads of the Russian and Ukrainian state-run gas companies, Gazprom and Naftogaz, respectively, would be present for talks with other Russian and Ukrainian officials and representatives of the European Union.

The heads of the two companies held talks in the Russian capital overnight on ways to end their gas crisis, the first time they have met since Moscow cut gas to Kiev.

"Tonight in Moscow talks took place between (Gazprom chief executive) Alexei Miller and (Naftogaz chief) Oleg Dubina during which they discussed ways to end the intensifying crisis situation," Gazprom's official spokesman Sergei Kupriyanov was quoted as saying by Russian news agencies.

The organization of the Brussels talks brought some badly-needed focus to a chaotic dispute that began as a commercial disagreement between Gazprom and Naftogaz and has mushroomed into a full-blown international crisis.

While Russia and Ukraine have exchanged accusations of guilt, a dozen countries that rely heavily on Russian gas, most of them in the EU, have reported huge drops in gas supplies in the depths of a bitterly cold winter.

Slovakia and Romania have declared states of energy emergency, Bulgaria has ordered gas rationing for industry and Hungary, Croatia and Bosnia reported two consecutive days of complete stoppage of Russian gas supply.

Tens of thousands of people have been left without heating in their homes.

Gazprom ordered delivery of gas to Ukraine itself halted on New Year's Day after it failed to reach agreement with Naftogaz on payment of arrears for Russian gas already used by Ukraine and on prices for supply in 2009.

The move triggered a chain reaction: Russia accused Ukraine of "stealing" gas it was trying to ship to Europe and Ukraine countered that Russia had deliberately reduced supplies to provoke a crisis.

A spokeman for Russia's powerful Prime Minister Vladimir Putin on Wednesday insisted Gazprom had continued to pump volumes required by European consumers through the Ukraine pipeline network, and accused Kiev of "blackmail."

On Wednesday, Gazprom ordered a halt to gas shipments through Ukraine, asserting that Ukraine had already shut down all six pipelines that get the gas to Europe and accusing Kiev of diverting the gas for its own use illegally.

On the eve of the Brussels meeting, Russian President Dmitry Medvedev, in a telephone conversation with Ukrainian President Viktor Yushchenko, laid down a number of conditions for any resumption of Russian gas shipments via Ukraine.

They included a demand that Ukraine begin paying market prices for Russian gas immediately -- Russia has long sold gas to Ukraine at discounted prices -- and an independent EU monitoring plan to verify gas flows through Ukraine.

Gazprom has warned that leaving the pipeline network in Ukraine empty in freezing temperatures for a prolonged period could cause severe damage to the infrastructure. Long repair time would delay resumption of gas flow to Europe.

Source: AFP


Eat more beans to produce more gas!
Plus we should remember two important facts. At first, Ukraine will suffer losses because the price for using Ukranian gas pipe didn’t grow proportionally to the Rusiian gas price. Let’s make a simple calculation. Russia pays Ukraine $1,7 for transporting 1000 cubic meters of gas on 100 km. Average distance which is passed by Russian gas by our pipe aproximately 1100 km. Russia transports to Europe at least 110 milliards cubic meters of gas annually. So Ukraine gains about $2 milliards anually. And the lowest European price is $4 per 100 kilometers, so we could gain about $4,7 milliards. Accordingly we can say that Timoshenko complimented Putin about $2,7 milliards.

How much gas could be purchased by these? 10-12 milliards of cubic meters at least. Timoshenko grants Putin more than the 50% of annual gas necessity of Ukraine. Receiving the increasing of prices and Ukraine’s obligation to buy technical gas by own cost, though at favourable prices.