Translated material
Patience has run out
Gazprom delivered a new ultimatum to the Ukrainian government
The Ukrainian government’s disregard for the gas agreements between Vladimir Putin and Viktor Yushchenko on February 12 led to another dire warning from Moscow. The Russian President called his colleague in Kyiv and complained about the unsatisfactory pace of implementation of the gentlemen's agreement of the heads of state. After all, Naftogaz of Ukraine owed about $1 billion for gas supplies at the end of last year, of which only $240 million was repaid. After the conversation between the presidents, Gazprom official representative Sergei Kupriyanov made a special statement that if the accumulated problems do not are settled, then the gas concern on the morning of March 3 will reduce supplies to Ukrainian consumers by a quarter.Viktor Yushchenko reacted quickly: sending Prime Minister Yulia Tymoshenko a telegram demanding that she take immediate and comprehensive measures to fully repay the Ukrainian side’s debts for consumed natural gas. The government must also do everything to fully implement the entire package of agreements reached at the highest interstate level. And Mrs. Tymoshenko herself was summoned today at 9 am to the president for a report on the implementation of instructions.
The culprit behind the tension remained silent yesterday. However, in the evening, the press service of the Ukrainian government, according to ITAR-TASS, released a statement from First Deputy Prime Minister Alexander Turchynov, who announced the transfer of another $337 million to pay off the debt for last year’s gas supplies. “However, I am very sorry that Ukraine paid these billions of hryvnias to intermediaries for debts that were artificially created by their predecessors,” he said. Previously, the Ukrainian concern promised to fully pay for last year in early March. Today, the gas issue will become one of the main issues in meeting of the cabinet of ministers.
The Kremlin press service did not disclose the details of Vladimir Putin’s call to Viktor Yushchenko. But Gazprom’s ultimatum immediately dotted the i’s. “This cannot continue like this. If the accumulated problems are not resolved, in order to ensure its economic interests in connection with non-payments for gas, Gazprom will reduce supplies to Ukrainian consumers by 25% on March 3 of this year from 10.00,” Mr. Kupriyanov said. According to him, on February 14, a full set of documents was sent to Ukrainian colleagues for study and signing, but to date there has been no official response and the documents have not been signed. “Meanwhile, the unregistered consumption of Russian gas continues; at the moment, 1.9 billion cubic meters of Russian gas have already settled in Ukraine,” noted a Gazprom representative. And this is not counting the Central Asian gas consumed without a contract (at least the same amount).
A little later, the head of the Secretariat of the President of Ukraine, Viktor Baloga, confirmed that during a telephone conversation, Vladimir Putin informed Viktor Yushchenko about a possible reduction in gas supplies from Wednesday. However, apparently, it was decided to give Kyiv a few more days and postpone the restrictions until the day after the presidential elections in Russia. According to Mr. Baloga, during the conversation, Vladimir Putin stated that the payment made to date for used fuel is clearly inadequate for the entire debt and cannot be sufficient for the further uninterrupted flow of gas to Ukraine. The Russian leader also noted that Ukraine continues to consume fuel for free, thus increasing the amount of debt. “This state of affairs does not give reason to hope that the debt amounts will be paid in full and within an acceptable time frame. “It’s hard to blame our neighbors for such a position. Obviously, the efforts of our government regarding full and timely payment for gas were insufficient,” complained the head of the secretariat of Viktor Yushchenko. Mr. Baloga expressed concern that the situation could negatively affect Ukraine's ability to fulfill transit obligations for Russian gas supplies to Europe.
As you know, on February 12, Vladimir Putin and Viktor Yushchenko, after a three-hour conversation, decided to adjust the scheme for imported gas supplies to Ukraine, as well as settle Naftogaz’s debt for last year. Prime Minister Yulia Tymoshenko, who has great political and gas ambitions, did not participate in the development of agreements, and she was simply tasked with ensuring the implementation of what the presidents sealed with a handshake. They agreed that instead of the existing intermediaries RosUkrEnergo (50% owned by Gazprom, 45% by Dmitry Firtash, 5% by Ivan Fursin) and Ukrgazenergo (a parity joint venture between RUE and Naftogaz), two new enterprises would be created. Their founders, on a 50/50 basis, should be Gazprom and Naftogaz. The first joint venture will supply Central Asian gas to the Russian-Ukrainian border at a price that covers the costs of purchasing and transporting Central Asian gas and its own margin. The second is to distribute gas on the territory of Ukraine. In parallel with the formation of the joint venture, the issue of registration and payment for the gas that Naftogaz has been consuming since the beginning of the year must be resolved.
Last week, Yulia Tymoshenko nevertheless paid a two-day working visit to Moscow to try to develop the gas dialogue in her own way. However, it faced a wall of misunderstanding as Prime Minister Viktor Zubkov, President Vladimir Putin and Gazprom chief Alexei Miller consistently declared their commitment to the agreement with Mr. Yushchenko. And they demanded that the Prime Minister of Ukraine solve the debt problem.
There was no consensus on agreements regarding work this year. Ms. Tymoshenko refused to talk about creating a joint venture to sell gas on the Ukrainian market, insisting that this should be done exclusively by Naftogaz.