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06/12/2016

Putin warns Merkel Russian gas piped to EU could be siphoned off in Ukraine

Energy

Putin warns Merkel Russian gas piped to EU could be siphoned off in Ukraine

Bad weather has hit Ukraine, 14 November 2016.

[uaposition]

Russian President Vladimir Putin warned Germany’s Chancellor Angela Merkel yesterday (14 November) of the risk of Ukraine siphoning off Russian gas destined for Europe, the Kremlin said.

In a statement, it said that in a phone call the two leaders agreed that talks would be held involving the Russian energy ministry, gas giant Gazprom and the European Commission on the issue.

Putin said the risks of unsanctioned gas siphoning by Kyiv had increased because of expectations of a cold winter.

Most of the gas sold by Russia to European countries flows along pipelines crossing Ukraine. Russian gas accounts for over a third of gas consumption in the EU.

Neighbouring Ukraine has not bought gas from Russia for a year because of its political conflict with Moscow, which annexed Ukraine’s Crimea region in 2014.

In the past, the European Commission has successfully brokered deals between Moscow and Kyiv on the sale of Russian gas to Ukraine. This time however Ukraine decided it didn’t need EU’s help.

The European Union is eager to mediate between Kyiv and Moscow, because in 2009, when Gazprom stopped deliveries to Kyiv, the country used gas destined for Europe for domestic consumption and left several EU countries in the cold.

In the summer period, Ukraine’s underground gas storage needs to be filled, the replenishment usually taking place until mid-October. The underground gas storage is needed not only for domestic use, but for ensuring transit.

The Commission recently said that the current gas storage level was only enough in case of a mild winter.

Ukraine’s Naftogaz will try to deal with Gazprom without EU mediation

Ukrainian gas company Naftogaz issued a statement on Wednesday (8 June) indicating that it will consider purchasing gas from Gazprom, if the price is competitive, via direct contacts between the two companies.

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Putin said last month Russia was ready to resume gas deliveries to Ukraine at “any second” if Kyiv agreed to pre-pay for supplies.

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