Russia And Ukraine: History Of The Gas Wars

MOSCOW, Russia -- The gas wars between Russia and Ukraine began with the break up of the USSR in 1991.

Russia pumps around 100 billion cubic meters (3.5 trillion cu ft) of gas annually to Europe via Ukraine.

After the collapse of the USSR in 1991, Ukraine received cut-price Russian gas, but it still ran up a large debt.

Moscow threatened to close the valve, and Kiev threatened to cut gas transit to Europe, but a further reduction to $50 per 1,000 cubic meters was renegotiated.

However, Ukraine’s 2004 Orange Revolution, and subsequent pro-Western stance, spelt the end of preferential rates for the former sister republic.

Ukraine demanded higher transit fees; Russia insisted on higher prices for gas consumed by Ukraine.

Negotiations remained deadlocked at the end of 2005, and on January 1, 2006, Gazprom cut off supplies, while continuing to export through Ukraine’s territory and accusing Kiev of siphoning off gas illegally.

Three days later, a compromise five-year deal was signed.

But exactly three years later, gas supplies to Ukraine and onward to Europe were suspended for almost two weeks, as more debts accumulated and irreconcilable differences over prices re-emerged.

On January 19, 2009, after prolonged negotiations, new contracts were signed that, for the first time, contained a clear gas price calculation formula, and supply resumed.

Those were the agreements for which former Ukrainian prime minister Yulia Tymoshenko was convicted.

Source: Russia Now