Ukraine is ensuring smooth transit of Russian gas supplies to Europe but there is a risk of disruption next year due to uncertainty on payments, the head of Russian gas giant Gazprom said Saturday. Gazprom chief executive Alexei Miller, speaking in a meeting with foreign research and media specialists on Russia, hailed the "remarkable" current co-operation between Russian and Ukrainian state gas firms.
But he cautioned that "there is a political risk" and a measure of uncertainty about next year that could negatively impact that relationship as it has in the past. A dispute on gas pricing between the Russian and Ukrainian gas companies at the start of this year led to a shut-off of Russian supply to Ukraine which in turn triggered shortages to European clients further downstream.
The bulk of Russian gas supplies to Europe are piped through Ukraine and the relationship on gas between Moscow and Kiev has direct implications for the energy supplies of many third-party countries in Europe. Miller's general tone was upbeat and he reitered assertions that Gazprom would remain a reliable supplier of natural gas to countries in Europe and other international customers.
"There are no problems. They are fulfilling all aspects of the contract, including transit," Miller said of Ukraine's state-run natural gas company Naftogaz. He said Gazprom anticipated no gas payment problems with Ukraine for at least the remainder of this year. Miller cautioned however that beyond that the situation was less clear.
"Without doubt there will be no problem with payment before the end of the year. But when we ask our Ukrainian partners about 2010, their response is 'we don't know'. So there is a risk" of problems next year, he said. In a meeting with President Dmitry Medvedev last Monday, Miller said Ukraine was seeking to alter the terms of Russia's payment to Ukraine of fees for the transit of Russian gas to Europe. When Miller told Medvedev that this was not permitted under the current gas contract between the two countries, Medvedev replied: "Then don't pay! There's a need to act in accordance with the contract that has been signed."