Russia seeks EU monitoring in Ukraine gas dispute

05 Jan, 2009

Russia on Sunday asked the European Union to provide monitoring of Ukraine's gas transit system and charged Ukraine was stealing gas bound for Europe, as Kiev hit back with its own charges.
The exchange of accusations added to a furious row over payments demanded by Russia's Gazprom for gas supplied to its ex-Soviet neighbour.
"Given that (Ukrainian state energy company) Naftogaz is not allowing monitors engaged by Gazprom into gas monitoring stations in Ukraine, we sent a letter to the European Commission with proposals for ensuring independent monitoring of volumes of gas transiting Ukrainian territory," Gazprom spokesman Sergei Kupriyanov said in televised comments. "In the last 24 hours we delivered to the entry of the Ukrainian transit system 295 million cubic metres, in other words more than needed by European consumers, and at the exit received 270 million cubic metres. So they stole 25 million cubic metres," he said.
In Kiev, Naftogaz blamed Russia for a reduction in natural gas supplies transiting Ukraine, saying Russia was "manipulating" the supply route and that Moscow had given notice it was cutting supplies through one branch of the transit network, known as Soyuz. Naftogaz "urges Gazprom to stop technical manipulation of volumes and gas supply routes, synchronise the work of the gas distribution systems of Russia, Ukraine and Europe" and resume talks, Naftogaz said in a statement.
Gazprom was planning to cut supplies through the Soyuz route by 52 million cubic metres a day to 20 million cubic metres, with "unpredictable consequences for the entire gas distribution system in Europe," Naftogaz said. In Moscow, Gazprom placed the blame for reductions in supplies experienced by a handful of central European countries firmly at Ukraine's door.
"Gazprom is providing gas at the entry to the Ukrainian gas transport system in full accordance with the transit contract and the requests of European consumers," Kupriyanov said. On Saturday, a handful of eastern European countries reported cuts in Russian gas supplies in connection with the gas payment dispute that has broken out between Moscow and Kiev.
Romania said supplies were 30 percent below the normal level although reserves held in store were adequate to maintain normal supplies to consumers. Polish pipeline operator Gaz-System said deliveries had dropped 11 percent from 2100 GMT Friday and remained at that level on Saturday, although the shortfall was being made up by supplies via Belarus.
In Bulgaria, the head of Bulgargaz said deliveries had been cut by between 10 and 15 percent, but added the country had a month's reserves. The disruption began after Russia cut gas supplies intended for the Ukrainian market on New Year's Day in a row over payment for supplies Ukraine received in November and December, fines for late payment and the price for 2009 supplies.
The EU has voiced concern at the disruption and urged the two sides to patch up their differences, which recall a similar row in 2006. Ukraine is the main route for Russian gas supplies to the EU, which relies on Russia for about a quarter of its gas needs.
While Gazprom says Ukraine has refused to negotiate, Naftogaz's chief, Oleg Dubna, said he was in fact in daily contact with Gazprom by telephone. "We have not quit negotiations. We are talking over the phone every day," Dubina told journalists on Saturday. "I'm ready to fly out to Moscow even now if there are possibilities. If there is a normal approach or normal relations," he said.
Each side has threatened lawsuits against the other, with Ukraine claiming that provisions for trans-shipment of gas in a loose 2005 protocol are insufficient for a proper co-ordination of supplies. Both sides have been courting support from EU nations, with Gazprom's deputy chief executive, Alexander Medvedev, undertaking a tour of European capitals.
Unlike a similar gas dispute in 2006, experts say EU states and Ukraine itself have accumulated sufficient gas reserves to cope without fresh Russian supplies for several weeks. Behind the spat lie claims of corruption in the notoriously murky gas trade, tensions over the proper price Ukraine should be paying, wider political differences between Moscow and Kiev and divisions within the Ukrainian leadership itself.

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