Russia keeps pressure on Ukraine over gas
Updated: 2005-12-31 10:01
Russian authorities refused to ease their tough stance in a dispute with
Ukraine over gas prices Friday, issuing a stern new threat to halt supplies to
its neighbor on New Year's Day and criticizing Kiev's call for more time
to reach a deal.
Ukrainian leaders, meanwhile, tried to reassure the ex-Soviet republic's 48
million people they will not be left in the cold by the conflict that has
underlined the political tension caused by the election of a Westward-leaning
president in Ukraine last year.
The chief of Russia's natural gas monopoly, OAO Gazprom, reiterated that it
will halt supplies to Ukraine on Sunday morning unless a new contract is signed
with its Ukrainian counterpart.
"The actions will be precise and resolute," Alexei Miller said on
Gazprom-owned NTV television. The station cut into a news broadcast to show
Russian authorities are demanding that
Ukraine pay $230 ¡ª more than four times the current price of $50 ¡ª per 1,000
cubic meters of gas. Ukraine wants an increase that would bring what it pays
closer to world prices phased in gradually and says $75 to $80 is a fair price
Russia's natural gas giant Gazprom chief
Alexei Miller speaks to press at his headquarters on Friday, Dec. 30,
The price Russia wants Ukraine to pay is far higher than it is charging other
former Soviet republics ¡ª even those that are seeking, like Ukraine, to shake
off Russian influence and integrate with the West.
Nadia Kazakova, an oil and gas analyst at Alfa Bank in London, said West
European countries would pay an average of $240 per 1,000 cubic meters next
year. Hungary is paying $240 for Russian gas, and Romania will pay about $280
starting next year, officials said.
"There is room for negotiation between $230 and (an) actual or reasonable or
market price which Ukraine might be willing to pay," Kazakova said. "Ultimately
I think there will be some resolution."
But with no sign of progress toward a deal, Ukrainian President Viktor
Yushchenko proposed Friday that Russian President Vladimir Putin order both
countries' companies to sign a contract in the first 10 days of January,
freezing prices until then, Yushchenko's office said.
Putin's press service said the Kremlin had not received the telegram in which
Yushchenko made the proposal, and there was no immediate reaction from the
Russian leader. But Gazprom said it feared the proposal would lead to indefinite
Graphic showing distribution of gas pipelines in
Nations elsewhere in Europe get gas supplies through Ukraine, and Gazprom has
informed its European customers in a letter that supplies could be restricted if
Kiev decides to take gas meant for transit further west.
The letter guaranteed delivery of all contracted gas as far as the
Russian-Ukrainian border, but added that Gazprom "cannot completely exclude the
risk of unsanctioned removal of gas from the transit system by the Ukrainian
side," Gazprom spokesman Sergei Kupriyanov said.
Yushchenko's office said Ukraine's Cabinet had introduced measures Friday
that would ensure the unhampered flow of gas into Ukraine and its transit to EU
countries until a new contract is signed. But Prime Minister Yuriy Yekhanurov
has said Ukraine has the right to take 15 percent of shipments through its
territory as transit fees.
The EU on Friday called a special meeting of European energy officials for
next week to consider any disruption of supplies to Western Europe.
EU Energy Commissioner Andris Piebalgs convened a meeting of the EU's Gas
Coordination Group next Wednesday in Brussels "to deal with all eventualities."
Meanwhile, analysts said a Russian bid Thursday to buy up natural gas from
another major supplier to Ukraine, Turkmenistan, would leave the Central Asian
nation with little gas to sell to Ukraine.