Gazprom warns of European gas delivery cut

Uchenna Izundu
International Editor
LONDON, Dec.22 -- Europe's gas supplies could be disrupted because of OAO Gazprom's dispute with Ukraine over unpaid bills, the company's chairman warned.

Gazprom is seeking $2.4 billion from Ukraine's state gas company Naftogaz and warns that if the dispute is not resolved by Jan. 1, then Gazprom could halt gas supplies.

Russian media reported Chairman Viktor Zubkov, who is also Russia's first deputy prime minister, said: "We cannot rule out that the position of the Ukrainian side and its certain steps, which are linked to gas transit through Ukrainian territory, could lead to a disruption of supply stability to Europe."

Andris Piebalgs, EU energy commissioner, is prepared to travel to Moscow for emergency talks with the Russians. "I am very worried," he said.

Gazprom Chief Executive Officer Alexei Miller told European customers Gazprom has been helping and continues to help its Ukrainian partners as much as possible.

"Taking into account the foregoing risks caused by the Ukrainian side's noncompliance with its contractual obligations, I would nevertheless like to assure that OAO Gazprom will fulfill all of its contractual obligations to its European partners in full," he wrote.

Ukraine wants to pay $100/Mcm for Russian gas in 2009, while Gazprom is demanding international prices of $250/Mcm to $300/Mcm. Protracted negotiations continue

Russia's warning of a gas shortage comes 24 hr before it hosts a meeting of the world's major gas suppliers to formalize a production cartel that Western consumers are worried could boost energy prices.

Ukraine is in a financial crisis where its currency has lost 4% of its value since September due to a drop in steel exports, and there has been a major loss of confidence in the banking system. Political infighting has crippled the country, but the International Monetary Fund has given the government a multi-billion loan to bail it out.

In January 2006, Gazprom cut supplies briefly to Ukraine, a major transit country to the European Union, following its argument over an increase of gas prices. Several EU countries were affected, and the move prompted European policymakers and politicians to look for alternative gas suppliers as Russia provides 25% of the EU's gas needs.

Contact Uchenna Izundu at uchennai@pennwell.com

Related Articles

IEA finds US energy policy improved in latest in-depth review

12/19/2014 US energy policies have come into sharper focus in the last six years, the International Energy Agency said in its latest periodic review. It speci...

Comstock to suspend 2015 oil drilling in Eagle Ford, TMS

12/19/2014 Due to low crude oil prices, Comstock Resources Inc., Frisco, Tex., plans to suspend its 2015 oil-directed drilling activity on properties in the E...

AWE pulls out of Otway permit

12/19/2014 AWE Ltd., Sydbey, has decided to pull out of Perth-based junior WHL Energy Ltd.’s offshore Otway Basin permit Vic-P67 after a series of time extens...

Marathon cuts 2015 budget amid ‘current price environment’

12/18/2014 Marathon Oil Corp. expects to spend $4.3-4.5 billion in its capital, investment, and exploration budget for 2015. That total represents a 20% decli...

Russia’s Turkey pipeline deal possibly may keep door to Europe ajar

12/18/2014 Russia’s memorandum of understanding to build a natural gas pipeline to Turkey after canceling its South Stream project could help keep the door op...

MEG Energy cuts capital spending for 2015 to $305 million (Can.) from $1.2 billion

12/18/2014

MEG Energy Corp., Calgary, is reducing its 2015 capital spending plans to $305 million (Can.) from the original budget of $1.2 billion.

Severance tax would backfire, Pennsylvania association leaders warn

12/17/2014 Enacting a severance tax aimed at Pennsylvania’s unconventional natural gas activity would substantially harm the commonwealth beyond the industry ...

MARKET WATCH: Oil prices held steady on NYMEX awaiting crude inventory

12/17/2014 Oil prices held fairly steady on the New York market in Dec. 16 trading while Brent crude oil prices fell by more than $1/bbl on the London market....

Encana to focus spending on four core shale assets in 2015

12/16/2014 Encana Corp., Calgary, reported plans to spend $2.7-2.9 billion on its capital budget with roughly 80% of this total directed towards four of what ...

White Papers

AVEVA NET Accesses and Manages the Digital Asset

Global demand for new process plants, power plants and infrastructure is increasing steadily with the ...
Sponsored by

AVEVA’s Approach for the Digital Asset

To meet the requirements for leaner project execution and more efficient operations while transferring...
Sponsored by

Diversification - the technology aspects

In tough times, businesses seek to diversify into adjacent markets or to apply their skills and resour...
Sponsored by

Engineering & Design for Lean Construction

Modern marketing rhetoric claims that, in order to cut out expensive costs and reduce risks during the...
Sponsored by

Object Lessons - Why control of engineering design at the object level is essential for efficient project execution

Whatever the task, there is usually only one way to do it right and many more to do it wrong. In the c...
Sponsored by

Plant Design for Lean Construction - at your fingertips

One area which can provide improvements to the adoption of Lean principles is the application of mobil...
Sponsored by

How to Keep Your Mud System Vibrator Hose from Getting Hammered to Death

To prevent the vibrating hoses on your oilfield mud circulation systems from failing, you must examine...
Sponsored by

Duty of Care

Good corporate social responsibility means implementing effective workplace health and safety measures...
Sponsored by

Available Webcasts


On Demand

Optimizing your asset management practices to mitigate the effects of a down market

Thu, Dec 11, 2014

The oil and gas market is in constant flux, and as the price of BOE (Barrel of Oil Equivalent) goes down it is increasingly important to optimize your asset management strategy to stay afloat.  Attend this webinar to learn how developing a solid asset management plan can help your company mitigate costs in any market.

register:WEBCAST


Parylene Conformal Coatings for the Oil & Gas Industry

Thu, Nov 20, 2014

In this concise 30-minute webinar, participants have an opportunity to learn more about how Parylene coatings are applied, their features, and the value they add to devices and components.

register:WEBCAST


Utilizing Predictive Analytics to Optimize Productivity in Oil & Gas Operations

Tue, Nov 18, 2014

Join IBM on Tuesday, November 18 @ 1pm CST to explore how Predictive Analytics can help your organization maximize productivity, operational performance & associated processes to drive enterprise wide productivity and profitability.

register:WEBCAST


US HYDROCARBON EXPORTS Part 3 — LNG

Fri, Nov 14, 2014

US LNG Exports, the third in a trilogy of webcasts focusing on the broad topic of US Hydrocarbon Exports.

A discussion of the problems and potential for the export of US-produced liquefied natural gas.

These and other topics will be discussed, with the latest thoughts on U.S. LNG export policy.

register:WEBCAST


Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected