Gasprom restrictions lifted; full gas flows to Ukraine

March 6, 2008
Russian gas transit via Ukraine to Europe is being carried out in full, said OAO Gazprom spokesman Sergei Kupriyanov, following the resolution of a long-running dispute between the Russian gas supplier and Ukraine.

Eric Watkins
Senior Correspondent

LOS ANGELES, Mar. 6 -- Russian gas transit via Ukraine to Europe is being carried out in full, said OAO Gazprom spokesman Sergei Kupriyanov, following the resolution of a long-running dispute between the Russian gas supplier and Ukraine. "The restrictions on gas deliveries to consumers in Ukraine have been lifted," he said.

Russia had cut its supplies of gas to Ukraine by 25% on Mar. 3 and a further 25% on Mar. 4, raising concerns in the European Union and US about Europe's energy security. Russia supplies about 25% of the EU's gas, most of it transiting Ukrainian pipelines.

The row between the two countries came to a head in February, when Gazprom, saying that Ukraine owed $1.5 billion for recent gas shipments, threatened to totally cut off supplies. The two parties failed to resolve the dispute, despite claims from both sides that an agreement had been reached, (OGJ Online, Feb. 22, 2008).

However, they apparently have resolved the issue of past debts and the pricing of 2008 supplies. The agreement was achieved, however, only after telephone negotiations involved Russian President Vladimir Putin and his Ukrainian counterpart Viktor Yushchenko as well as others by OAO Gazprom chief executive Alexei Miller and his opposite number at NAK Naftogaz Oleh Dubyna.

"The parties have agreed that gas delivered [to Ukraine] from Jan. 1 to Mar. 1, 2008, will be fully documented and paid for by Naftogaz Ukrayiny according to the scheme that existed at the beginning of the year," said Kupriyanov.

Nevertheless, EU energy commissioner Andris Piebalgs called for a Mar. 11 meeting of Europe's gas coordination group in response to the row's potential impact on EU gas deliveries.

"The European Union considers that in the past Gazprom has demonstrated its commitment to be a reliable supplier of gas to the European Union, as has the Ukraine played a similar role as a transit partner of the EU," Piebalgs said. "The EU places enormous importance on this," he said.

US State Department deputy spokesman Tom Casey said, "This dispute underscores the need for greater transparency in the Russia-Ukraine gas trade and also highlights again…that there needs to be a predictable flow of energy for Ukraine and the rest of the European market."

Contact Eric Watkins at [email protected].