As Ukraine-Russia Fight Over Natural Gas Again, Gazprom Ready To Shut The …
Someone needs to declare this union no longer salvageable.
Russia and Ukraine are at it yet again over natural gas payments with Gazprom threatening to stop deliveries by Friday. The latest he said-she said shouting match is bad news for eastern Europe. If Gazrpom shuts the spigot, 55% of the Russian natural gas bound for Europe will be cut from the market.
Here we go again.
On Tuesday, Ukraine’s state owned natural gas company Naftogaz blamed Gazprom for not fulfilling prepaid gas supply orders, “thereby breaking contractual terms.” Under the most recent agreement signed in Europe late last year, Gazprom was supposed to deliver 114 million cubic meters on February 22 and 23. instead, Naftogaz says it received 47 million on Sunday and 39 million on Monday.
Naftogaz said in a statement on its website today that it will not make advance payments for Gazprom gas unless Gazprom can offer assurances that it will adhere to the deal signed between Russian Energy Minister Alexander Novak, Ukrainian Energy Minister Yuriy Prodan and European Commission Vice President Guenter Oettingeron on October 30, 2014 in Brussels. The deal requires Naftogaz to pay for deliveries up front so as not to create outstanding debt with the Russian energy giant. Naftogaz paid off close to $4 billion in outstanding debts to Gazprom by December. It still owes $2.3 billion, according to Novak.
Gazprom hates Naftogaz. Naftogaz hates Gazprom. Let’s end this already. Both companies moving fast to sever ties, though Ukraine has more to lose than Russia if the two split.
Gazprom fears Naftogaz is up to its old tricks again. According to state controlled media outlet RT, Naftogaz has yet to pay for March deliveries and is extracting all it can from February deliveries. Gazprom’s CEO Alexey Miller told RT that if they didn’t pay within two days, Ukraine risked getting shut out yet again.
The gas battle are bad for Europe. Three large pipelines bringing Russian gas to Europe go through Ukraine. They stop in Poland, Hungary and Romania.
On the surface, it appears as if Gazprom and Naftogaz are struggling to interpret their October agreement, brokered by Europe. But looking at the imbroglio through a political lens makes it appear Kyiv is actively pushing Gazprom away. It’s as if the new leadership in Kyiv want to prove to Russia it has decided on a new lover, and she lives in Brussels. The question is, how bad does Brussels want this guy? Yet, without Europe acting as a mediator, Kyiv and Moscow will continue to violently disagree with one another.