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Crisis gas meeting set for Monday in Brussels; Ukraine denies stealing gas meant for Europe

3 January, 09:15 | Reuters
Crisis gas meeting set for Monday in Brussels; Ukraine denies stealing gas meant for Europe
MOSCOW/KIEV, Jan 2 (Reuters) - European countries began to suffer from reduced gas supplies on Friday after Russia cut deliveries to Ukraine in a contract dispute.

The Czech Presidency of the European Union said it would call a crisis meeting of envoys in Brussels on Monday and demanded that existing gas supply deals be honoured.

"We feel that the situation has now escalated to a point that substantiates an extraordinary meeting," Czech presidency spokesman Radek Honzak said. Talks would also probably be called soon with Moscow, another spokesman said.

"Energy relations between the EU and its neighbours should be based on reliability and predictability," the presidency said in a statement.

"Existing commitments to supply and transit have to be honoured under all circumstances."

Russia's gas export monopoly Gazprom accused Ukraine of stealing gas in transit. Gas importers in Romania, Hungary and Poland said pressure on their pipelines had dropped.

"Gas inflows from import fell by 30 to 40 percent ... This is because of Ukraine's dispute with Russia," Romania's state-controlled pipeline operator Transgaz director Ioan Rusu told Reuters by telephone.

There were similar reports of less steep supply falls from Budapest and Warsaw.

"Pressure started to decline at 1500 GMT. Pressure is declining continuously. However, the drop has not yet reached a critical level," Edina Lakatos, a spokeswoman for the Hungarian energy company MOL's natural gas transmission subsidiary, said.

Ukraine's state energy firm Naftogaz denied it was illegally siphoning off Russian gas.

Gazprom's accusation suggested Moscow was in no mood for compromise in a re-run of a 2006 argument that led to supply shortages across the EU.

"The Ukrainian side openly admits it is stealing gas and is not ashamed of this," Gazprom spokesman Sergei Kupriyanov said, adding that Gazprom had increased exports to Europe via an alternative route -- Belarus.

Poland said deliveries from Ukraine had dropped six percent but were being made up by deliveries through Belarus.

"The change in deliveries is not being felt by Polish natural gas consumers," said gas operator Gaz System and gas monopoly PGNiG in a joint statement.

NEW DOUBTS ABOUT RUSSIA

The European Union -- which receives a fifth of its gas via pipelines through Ukraine -- had initially said it considered the dispute between Moscow and Kiev to be a bilateral issue.

The row could raise new doubts about Moscow's reliability as an energy supplier and fuel suspicions in the West -- already running high since Russia's war with Georgia last August -- that the Kremlin policy us to bully pro-Western neighbours.

Russia denies politics are behind the dispute and says it is about prices and debts, but the two ex-Soviet neighbours have clashed over a drive by Ukrainian President Viktor Yushchenko to take his country into the NATO alliance.

Earlier on Friday, energy firms in Germany, Bulgaria and Turkey said their supplies were unaffected.

Europe, where temperatures fell below freezing overnight, has enough gas stockpiled to manage without Russian supplies for several days but could face difficulties if any disruption stretched into weeks, analysts said.

Talks between Naftogaz and Gazprom have not resumed since they collapsed two days ago. If they do restart, the negotiators will have to bridge huge differences.

Alexei Miller, CEO of Gazprom, said on Thursday he wanted Ukraine to pay $418 per 1,000 cubic metres (tcm) of gas, compared with the $179.50 Kiev paid in 2008. Ukraine says the most it can afford to pay is $235.

Gazprom charges about $500/tcm to customers in the European Union, though that is likely to fall by up to half this year. Gas prices track oil and crude has plummeted in value.

Gas markets in northwest Europe seemed unconcerned about the supply outlook over the next few days, with prices falling in Britain and Belgium on expectations of warmer weather.

"I guess everyone expects it (the Russia-Ukraine row) to be resolved fairly soon and if it's resolved over the next day or so then it shouldn't cause any problems, there is plenty of storage to cover things as well," one UK gas trader said.

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Guest    (Guest) | 03.01.2009, 17:38
It seems much more likely that Russia is underdelivering gas to EU in order to disrupt EU-Ukraine relations than Ukraine stealing gas.

On the other hand, there is no reason why Russia should sell gas to Ukraine at below-market prices.
Gene    (Guest) | 03.01.2009, 16:18
XAPKIV, I do believe Ukraine is stealing gas. Countries being served by Russian gas thru Ukraine report a drop in the pressure. Plus, there have been reports by others in Ukraine that it is happening. I know you can\'t believe everything you read, but I do tend to believe this is happening. Most of Ukraine\'s leaders learned their corruption and ineptness from the soviet system of mafia behavior, so don\'t be too surprised at their behavior, even tho they have much gas in reserve. But...I do like your comments.
What bothers me the most is some of the threatening statements by Putin. Russia\'s economy is hurting and they need the transit system through Ukraine. We saw what they are capable of in Georgia. If Ukraine\'s politicians do not act carefully, one needs to fear the Russian Bully Bear, as I doubt Europe will come to its\' rescue.
elmer    (Guest) | 03.01.2009, 17:17
Gene, Ukraine is not stealing gas. roosha reduced the pressure at the supply points, and said so. The reason the pressure dropped is because roosha reduced it deliberately. Gazprom has been engaging in a hysterical, manic media blitz, sovok style, to try to propaganda its way out of any blame. This includes the comments you see here from the little rooskie sovoks who bleat, like sheep, that \"Ukraine doesn\'t want to pay.\" How does one negotiate on a business basis with someone who says \"pay $250, no, wait, pay $481, no, wait, pay the \'market price\'\"?

European prices are scheduled to FALL, as the article notes. So what Gazprom/roosha are trying to do is finance their profits on the backs of Ukraine.

And I think Europe will indeed be looking elsewhere for energy supplies. One can\'t rely on rooshans for anything - except decrepit, corrupt, stupid behavior.
Mike2    (Guest) | 04.01.2009, 00:47
You are very well informed and seem quite sure of what you\'re saying.

In business i would do exactly the same. No skidka for a neighbour who blocks my truck just because he is my neighbour.

It is Ukraines stupidity that put itself in a position with no more options. Just dont buy russian gas. They have other clients anyway.
Guest    (Guest) | 03.01.2009, 16:18
The gas row appears simple to me Russia is not obliged to subsidise Ukraine any longer it either pays the market price for gas or it doesnt get it.Ukraine is forever bleating to Europe and the rest of the world about its financesit is becoming tiring.They wouldnt pay the Russians in 2006 and their was no financial crisis then.Yushenko has many avenues to walk down regarding his countries continuing slide but he simply wont take them.He has to get his people to work many for the first time in their lives,Slap hefty taxes on luxury goods,certain types of cars,tobbaco and booze.Ukraine have little chance of being a EEC member or even hosting the 2012 World Cup in short here we have the biggest scroungers in Europe.Dream on.
elmer    (Guest) | 03.01.2009, 17:21
And what is the \"market price\" for gas, little sovok rooskie? So far, Gazprom has thrown out several \"market prices\" for gas - $250, no, wait, $481, no wait, what the Europeans paid 2 years ago.

And RosUkrEnergo, and the corrupt Gazprom insiders that participate in it, need their cut of \"market price\", too. After all, roosha is built on corruption.

How many rooshans benefit from \"market prices\"? Tell us, little sovok rooskie.
Mike2    (Guest) | 04.01.2009, 00:48
Just don\'t buy rooskie sovok gas and get a life.
Nickolas    (Guest) | 03.01.2009, 15:11
KGB Gazprom Inc. continues to read from their socialist Moscow manual of EU monopoly. The KGB thugs have no regard to the new and very low price of gas these days and what people are willing to pay or not.
XAPKIB    (Guest) | 03.01.2009, 13:19
Mikey2 - I sure wish your computer would get a virus so your idiotic commie comments would not appear. Better to leave people think you are a fool than to open your mouth (or your keyboard) and remove all doubts!!

Ukraine doesnt need to steal gas - it has massive underground reserves which even Gazprom acknowledges.
Ukraine doesnt want to agitate the EU because of its hopes of future EU integration, which is why it is using its underground reserves to make up for the REDUCED shipments from russia (russian propoganda tactic to attempt to make ukraine look like its stealing).

Negotiating the gas contract before a neutral EU partner is the wisest safest and BEST choice for ukraine, but not for clandestine putin & the kremlin cronies.
Negotiating before the EU will make the contract more transparent, which will limit the leeching & fleecing of the kremlin and kiev oligarchs.

only mikey could be opposed. enjoy your tea with putin, you traitor.
Mike2    (Guest) | 04.01.2009, 00:57
How democratic you are. Ukraine has underground reserves? Well use them and leave the others in peace.
We dont know the ins and out of this gas situation. It is your hate and paranoia talking here.
You false patriots are the problem here. You short sightedness, hate and stupidity helped Ukraine dig its own hole.
UkraineNow    (Guest) | 03.01.2009, 12:44
I disagree, Mike. Gas will only last so long. Europe will need Ukraine\'s food. With global warming and alternative sources of energy, and diminishing supplies Europe needs to alter. And you cannot live without food. That is what Ukraine has. That is what Russia wants. It wants its former occupied colonies - Poland, Czechia, Ukraine, back. And that is why it is playing politics with peoples\' lives. Expect little more from the neo-fascist Russia.
Mike2    (Guest) | 04.01.2009, 00:53
... and the saviour is America, right? Invading countries on the other side of the planet to grab the oil?

Europe can BUY food from Ukraine without having to go to bed with it. Norway is not a member of the EU and is doing very well.

The problem here is BEHAVIOUR, not what you have that will FORCE Europe to take in Ukraine. Things don\' work that way in the EU. It is a consensual approach.

And your are talking on behalf of Russia. Its is you saying what its intentions are. In europe we see Russia being annoyed by the US puppets creating stresses for nothing.
Mike2    (Guest) | 03.01.2009, 11:19
Having this debilistic conference in Brussels will have one effect: to scare off European partners ever to let Ukraine into the EU. Does Europe NEED to import such a scandal prone member? NO.
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