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19 August 2017
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Gazprom sends warning to Ukraine as deadline looms

Russia still committed to reducing supplies to Ukraine from March 3

Russia said on Thursday it was still committed to reducing supplies to Ukraine from March 3 in a debt and supply dispute, a deadline that falls the morning after Russia`s presidential elections, according to Reuters.

Russia`s gas export monopoly Gazprom has often threatened to cut gas supplies during disputes over price with former Soviet neighbours Ukraine and Belarus, but has never made good on the threats except in the New Year of 2006.

That brief disruption cut supplies to Gazprom`s west European customers, making them wary of any hint of any new row. A quarter of Europe`s gas supplies pass through Ukraine.

Gazprom`s chairman, First Deputy Prime Minister Dmitry Medvedev, is heavily favoured to win the presidential election, The gas giant said its insistence that Kiev pay arrears and sign a new supply deal or face reduced deliveries remained in force.

Ukrainian officials say the debt has been paid in full.

"The deadline is in force. No one has cancelled it and we plan to reduce supplies on March 3 if the problems are not solved," Gazprom spokesman Sergei Kupriyanov told Reuters.

Gazprom threatens to reduce supplies to Ukraine by 25 percent. Both Moscow and Kiev have promised supplies to Europe will be unaffected.

"For Ukraine to avoid a supply reduction, we need to clinch an agreement on cooperation in the gas sphere, which has all the necessary elements such as debts and supply volumes," he said, adding he was unaware of any Ukrainian delegation travelling to Russia any time soon.

Ukrainian officials, including President Viktor Yushchenko, have said Ukraine`s state energy firm Naftogaz had settled its gas debt for 2007, which Gazprom has put at $1.5 billion.

The Russian company said it was concerned about a lack of new supply deal for 2008.

On Thursday, Kupriyanov said the debt issue has not been fully solved either.

"The number of problems is huge - there is no supply contract for 2008 and nothing is clear with debts for 2007 because Naftogaz paid $270 million with dividends that they believe they are owed by Ukrgazenergo," he said.

"But there has been no decision on dividends by the firm whatsoever."

Gazprom sell gas to Ukraine via intermediary RosUkrEnergo, which is half controlled by Gazprom and half by two Ukrainian businessmen. The gas is then resold in Ukraine by UkrGazEnergo, a 50/50 venture between RosUkrEnergo and Naftogaz.

Yushchenko and Kremlin leader Vladimir Putin agreed earlier this month to settle the gas debt and, over time, to eliminate RosUkrEnergo and UkrGasEnergo and establish direct ventures between Gazprom and Naftogaz.

But a subsequent visit by Ukrainian Prime Minister Yulia Tymoshenko to Moscow, viewed less favourably by the Kremlin, brought a new round of tensions with both Moscow and Ukraine producing conflicting statements about the gas trade.

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