Gazprom to begin gas transport to Ukraine

OAO Gazprom agreed to again resume flow of natural gas supplies to Ukraine starting Jan. 13 in a deal brokered by the European Union.

Uchenna Izundu
International Editor

LONDON, Jan. 12 -- OAO Gazprom agreed to again resume flow of natural gas supplies to Ukraine starting Jan. 13 in a deal brokered by the European Union.

During a televised Jan. 12 meeting, Gazprom Chief Executive Alexei Miller told Russian Prime Minister Vladimir Putin that the company would start test supplies to Ukraine starting 7 a.m. GMT. Ukraine is the transit route of gas supplies to western Europe and, Miller warned, if there was any siphoning of gas, Russia would decrease its volume accordingly.

An international gas monitoring group was established under the EU led agreement to monitor the transit of gas from Russia to Europe via Ukraine.

But Russia and Ukraine continue to disagree over major points, including who should pay for the technical gas in the transit process. Neither have they agreed a long-term supply deal that could endanger their truce.

Last week Gazprom stopped domestic gas supplies to Ukraine in a dispute over unpaid bills in 2008 and new gas prices for 2009, but continued exporting gas to western Europe through Ukraine. However, it accused Ukraine of stealing gas and stopped deliveries altogether (OGJ Online, Jan. 8, 2009). Several countries in Europe, including France, Italy, and Germany and other eastern European nations complained of a shortage in natural gas imports from Russia.

Austria has agreed to send large capacity heaters and electrical generators to Moldova, which has stopped receiving Russian gas.

During a press conference in Brussels on Jan. 12, Alexander Medvedev, deputy chief executive of Gazprom, stressed the importance of diversifying gas supply routes and that Gazprom was developing storage facilities in Austria, France, Germany, the UK, and Belgium.

But relations remain strained between the parties as Medvedev also warned that Gazprom could sue Ukraine for up to $800 million in damages from the dispute.

"Our lawyers are preparing all defensive measures. Even if such lawsuits theoretically crop up, we will readdress them [to Ukraine]," Medvedev told Eko Moskvy radio station.

Contact Uchenna Izundu at uchennai@pennwell.com.

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