Russie-Ukraine : Bruxelles veut prévenir une nouvelle crise gazière[en] 

European Commission President José Manuel Barroso warned EU leaders at a 19 June summit that European nations must not sleepwalk into another gas crisis, which he said could hit Europe within weeks as tensions between Ukraine and Russia resurface (EurActiv 19/06/09). 

Ukraine transports the bulk of Russian gas supplies to Europe and is seeking $4-5 billion in funds to build up stockpiles of gas before winter, when demand is expected to rise by a third (EurActiv 17/01/09). 

Gazprom needs to store gas in Ukraine, because the capacity of the transit system does not allow it to fully serve Europe's needs during a cold winter without using Ukraine's underground storage facilities. Gazprom says it cannot simply store gas in Ukraine for fear that Kiev will misappropriate it. 

In recent years, Gazprom has thus been selling gas to Kiev and buying it back in winter: a scheme which works well when gas prices are on the rise, but which would trigger heavy losses at Naftogaz this year, because gas prices are set to fall. 

Recently, Commission sources confirmed that the EU observer mission sent to Russia and Ukraine last January had failed to assess the contents of underground storage facilities in Ukraine. 

"We know only what we are told," the Commission representative replied when asked if anyone in Brussels knew what was in storage. 

Experts at the EU executive also explained that payments for gas to be stored became a problem as a result of the January agreement (see EurActiv LinksDossier on 'Pipeline Politics'). Previously gas in storage was the property of intermediaries, but now it is the property of Ukraine, they said. 

The IMF, European Commission, European Bank for Reconstruction and Development, European Investment Bank, Russian gas export monopoly Gazprom and Ukrainian state energy firm Naftogaz met in Brussels for talks to secure money for Naftogaz. 

"If they start pumping by the beginning of August, we should be okay," an EU official said. 

But banks are wary of pouring money into the state-owned gas company without assurances it will be radically restructured to cope with Ukraine's severe economic crisis. A power struggle between Ukrainian Prime Minister Yulia Tymoshenko and President Viktor Yushchenko and looming elections could make agreement on Naftogaz hard to reach in a country that is strategically positioned between Europe and Russia. 

Ceyla Pazarbasioglu, the IMF's mission chief to Ukraine, said political consensus was important on how to make Naftogaz more transparent and improve its finances. 

"For us, it will be key to have consensus on how to address (Naftogaz's) problems and to have a time-bound action plan," said Pazarbasioglu, who was attending the Brussels meeting. 

"From our perspective we would like to see a reasonable and feasible financing plan by the company [...] From a medium-term perspective we would like to make sure this isn't a permanent drain." 

Monthly fears 

Concerns are growing about Ukraine's ability to pay monthly bills for its own domestic gas needs. The next is due on 7 July. 

Ukraine expects a bill of about $300 million for June imports of 1.1 billion cubic metres of gas, and Yushchenko's energy envoy said last week about $120 million of that would have to be borrowed. 

Yushchenko has accused Tymoshenko of pursuing policies that will lead to Naftogaz's destruction by issuing credits through state banks to ensure payment of gas. 

Russia, which opposes Yushchenko's drive to join NATO and the EU, wants the EU to bail out Ukraine. The European Commission has acknowledged that stop-gap funds as well as a lasting solution are needed, but has no fund for helping Ukraine. 

Gazprom, which has also been hit by the recession, has said it is confident Ukraine will pay its bills for June consumption, but EU gas experts predict increasing problems as it ramps up the amount of gas it puts into storage as winter approaches. 

About 19.5 billion cubic metres has already been stored, and a further nine bcm could be needed for storage before the winter, and EU official said, citing Russian sources. 

The International Energy Agency (IEA) showed its concern by saying it feared flows of gas could be disrupted at any time and the International Monetary Fund (IMF) mission to Ukraine called for political consensus in Kiev to stave off a crisis. 

"The difficult economic situation in Ukraine makes every monthly payment a challenge, and tensions remain high," IEA Executive Director Nobuo Tanaka said in a statement. 

(EurActiv with Reuters.)