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05/12/2016

Gazprom halts supplies to Ukraine

Europe's East

Gazprom halts supplies to Ukraine

Oil pipeline, Ukraine. [Shutterstock]

Gazprom CEO Alexey Miller announced on Wednesday (25 November) that due to non-prepayment for gas, Russia has halted supplies to Ukraine, with which tensions are growing.

“Today, as of 10 AM, Naftogaz took off all the previously prepaid volumes of Russian gas. A new prepayment has not been received. There is no new request for gas supplies from Naftogaz. Therefore the supplies are halted until the Ukrainian company makes a new payment,” Miller is quoted as saying.

The Gazprom statement also says that Ukraine, already today and before the start of the winter peaks, has begun actively offtaking gas from its underground storage facilities, which had not been sufficiently filled yet.

“The refusal to buy Russian gas creates serious risks for the safe gas transit to Europe as well as to supplies to Ukrainian customers in the coming winter.”

Indeed, European Commission officials have previously explained that for the security of transit of Russian gas to EU countries from Souteastern Europe, Ukraine’s storage capacity must be full before the winter.

The EU helped Ukraine conclude a winter gas supply deal with Russia on 25 September.

On that occasion, Commission Vice-President for Energy Maroš Šef?ovi? said that the executive would continue arranging for EU and international financing of Ukraine’s winter gas purchases.

“At least $500 million should be available by the end of this year,” he said.

>>Read: EU, Russia, Ukraine agree winter gas supply deal

Asked today to comment on the development, Anna-Kaisa Itkonen, Commission spokesperson on energy affairs, said the EU executive was aware, but “not particularly concerned”.

The gas flows to the EU transiting from Ukraine remain normal, Itkonen said, and the underground gas storage was at 16.5 billion cubic metres (bcm), approximately the same volume than the same time last year.

Ukraine currently uses own gas production plus reverse gas flows from Slovakia, she said. 

Ukraine-Russia relations deteriorated after Crimea was left without electricity supplies from after pylons carrying power lines to the Russia-annexed peninsula were blown up on the night to 22 November.

>>Read: Crimea without power from Ukraine after electricity pylons ‘blown up’

The Crimean peninsula, which Russia illegally annexed in March 2014, receives the bulk of its electricity from mainland Ukraine.