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11/12/2016

Gazprom warns of ‘serious risks’ for gas transit to Europe

Europe's East

Gazprom warns of ‘serious risks’ for gas transit to Europe

Moscow, October 2013.

[Thawt Hawthje/Flickr]

Gazprom said Tuesday (24 February) that there were “serious” risks to gas transit to Europe via Ukraine after Kyiv failed to make a pre-payment.

A new conflict between Gazprom and the Ukrainian Naftogas has come to light in recent days. Naftogas accuses Gazprom of violating an EU-brokered gas supply protocol and of not supplying prepaid gas to Ukraine. What appears to be happening is that Russia is supplying separatist regions with gas prepaid by Kyiv, instead.

According to a Naftogaz press release of 23 February, the Ukrainian company ordered 114 million cubic meters in line with the “Winter Package” supply conditions brokered by the European Commission, but Gazprom delivered only 47 million cubic meters. Naftogaz considers this failure to deliver prepaid gas a violation of the Binding Protocol signed by Russian Energy Minister Alexander Novak, European Commission Vice-President Günther Oettinger and Ukrainian Energy Minister Yuriy Prodan on 30 October 2014 in Brussels.

On his last day in office as Energy Commissioner, Oettinger helped broker a deal that would see Russia resume gas supplies to Ukraine over the winter in return for payments funded in part by Kyiv’s Western creditors.

The accord eased concerns that a new gas war would disrupt winter supplies of energy to EU states, notably through pipelines shut down across Ukraine since June.

>> Read: EU unblocks ‘unprecedented levels’ of cash to secure gas for Ukraine

According to Naftogaz, the company’s remaining prepaid balance with Gazprom as of 23 February stood at 287 million cubic meters.

Naftogas has also objected to shipments by Gazprom to the Donetsk and Lugansk regions which are not controlled by the Ukrainian government. Ukraine has stopped supplies to the region “because of infrastructure damage”, as a Naftgaz communiqué says.

Last week, Ukraine cut back supplies of gas to regions held by pro-Russian rebels, and Moscow began supplying gas to the separatist regions directly for the first time.

Although Russian Prime Minister Dmitry Medvedev said the gas shipments to eastern Ukraine were “humanitarian aid”, a Gazprom spokesman said at the time that supplies to rebel-held areas were being shipped under the contract with Naftogaz.

>> Read: Russia starts supplying gas to eastern Ukraine ‘as humanitarian aid’

Gazprom said today (24 February) that Ukraine had 219 million cubic metres (mcm) of gas left that would be used up in two days. With no new payment, Russia would be forced to stop supplies to Ukraine, Gazprom added, according to Reuters.

Gazprom added that there were “serious” risks to gas transit to Europe via Ukraine after Kyiv failed to make a pre-payment.

Naftogaz will not pay Gazprom’s bills for gas supplies to the military operation zone, which cannot be confirmed under the current contract, a representative of Naftogaz was quoted as saying by the Ukrainian national radio.

Positions

Asked to comment, Commission spokesperson Anna-Kaisa Itkonen basically said that the EU executive had seen the reports, but was looking for additional factual information to ascertain the facts. But she added that fact-finding was not easy, due to the nature of the allegations and also the fact that gas supplies have allegedly taken place “in areas that are currently not under the control of the Ukrainian government”.

The gas transit across Ukraine to the member states is normal and the Commission expects it will not be affected by the situation in Eastern Ukraine, said Itkonen. 

Further Reading