News.Kyiv.Me.

Russia May Disrupt European Gas in Repeat of 2009, Naftogaz Says

Russia may disrupt winter gas
supplies to Europe through Ukraine in a repeat of its action in
2009, the smaller nation’s state energy company said, as the
conflict between the neighbors spills over into international
trade.

“The transit is already threatened,” NAK Naftogaz Ukrainy
Chief Executive Officer Andriy Kobolyev said today in a
Bloomberg TV interview. “If we look back at 2009, then the
transit was stopped with no reason. We believe that this
situation might be repeated this winter.”

OAO Gazprom, the Russian export monopoly that has vowed to
do all it can to keep Europe supplied, shut off gas for use by
Ukraine on June 16 over a price and debt dispute. While fuel is
still transiting through Ukraine to Europe, CEO Alexey Miller
declined to say whether he would also end those shipments if
Gazprom found the country was siphoning off its gas en route.

Russian supplies to the west via Ukraine were disrupted in
January 2009 as Gazprom accused its neighbor of siphoning gas
bound for the European Union, a charge denied by the former
Soviet ally. More than 20 European states were affected, with 80
percent of Russian exports passing through Ukraine. Gazprom,
boosting flows via Belarus and the Nord Stream pipeline, now
ships about half of its gas to Europe through the country.

EU-bound gas, shut off for almost two weeks in 2009, has
been proceeding normally so far. Russian officials have said
there could be disruptions because of actions by Ukraine.

“From our experience we know that when autumn and winter
come and Ukraine needs gas, they will — excuse me for the well-worn word — start stealing,” Sergei Ivanov, head of the
Kremlin’s administration, said last month.

Escalating Conflict

Conflict between the two sides has escalated, with Russian
President Vladimir Putin inviting U.S. and EU sanctions against
his country by annexing Ukraine’s Crimean region. Ukraine is
considering sanctions against Russian companies including
Gazprom as the government in Kyiv prepares to try to oust armed
pro-Russian separatists in its east.

Ukraine is readying sanctions that may ban shipments from
Gazprom in breach of a transit contract with Naftogaz and at the
same time blames the Russian exporter, a Gazprom official said,
asking not to be identified because of company policy.

Ukraine will allow European companies to bring Russian gas
through its Soviet-era pipelines if a ban is imposed, Kobolyev
said. Companies will be able to buy fuel at the Russian border
in agreement with Gazprom and sign new transit contracts with
Naftogaz, which doesn’t plan to raise transport rates, he said.

“Naftogaz’s idea that European gas companies could buy
Russian gas at the Russian-Ukrainian border instead of getting
it delivered through Ukraine requires a renegotiation of the
transit contracts,” EU Energy Commissioner Guenther Oettinger
said today in a statement. That can’t be done in the “short
term” and the EU is working to set up trilateral talks in early
autumn, he said.

Ukraine may cope without Russian gas through the winter if
it gets enough so-called reverse gas flows from other European
nations and cuts consumption as planned, Kobolyev said.

To contact the reporters on this story:
Elena Mazneva in Moscow at
emazneva@bloomberg.net;
Ryan Chilcote in London at
rchilcote@bloomberg.net

To contact the editors responsible for this story:
Will Kennedy at
wkennedy3@bloomberg.net
Tony Barrett, Torrey Clark