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Wednesday, October 26, 2016

Ukraine plans to cut Russian gas Europe

In anticipation of autumn, not to mention the next winter, the EU is really afraid of the fact that the Russian-Ukrainian gas relations do not come to some compromise. Our country Ukraine’s gas he sells, and Kiev is trying to find ways to find fuel on the side, often buying it at exorbitant prices. It seems to be not the first time. But, it is obvious that to pursue such a policy, in Kiev in the future is unlikely to succeed. Especially on the eve of winter.

photo: Gennady Cherkasov

On the days Kyiv boasted that pumped into your store record volumes of gas. But here was paid for it, you didn’t. There are suspicions that Ukraine took gas from the transit pipeline, through which he comes from Russia to Europe. If so, then the fall and winter of the Old world may again face a “gas strike”, as Ukraine will send to Europe much less fuel than required by contract. Blame blame is Kiev, according to tradition, will be on Russia. Apparently, in order to prevent this situation, the Vice-President of the European Commission for energy Union maroš Šefčovič said that the tripartite format of gas talks between Moscow, Kiev and Brussels should be resumed.

Last system the gas conflict between Ukraine and Russia began in 2014, in fact, after the change of the Ukrainian authorities. Without going into details, say that Kiev, at first, demanded to reduce the price of Russian gas that Ukraine is buying at a discount (European countries buying gas is more expensive ($20-30). Second, put an ultimatum, insisting that the cost of transit of Russian gas through Ukrainian pipeline system in the EU has increased several times. Third, it stated that it will be able to abandon Russian gas and buy it in other States.

The fact that it’s a bluff, it was clear in advance. As has been said, Russian exports to Europe bring a lot of money, rather than supplies to Ukraine. Payment for gas transit was recorded not only by agreements between Moscow and Kiev, but also partially confirmed by the Europeans.

But as the refusal of Ukraine of Russian gas, then got up three problems. A long-term agreement on such supplies was signed for a long time — it Kiev promised to buy certain amounts, pay them off in time, and if you can’t do that, you will be required to pay a penny and fines.

Say that the paper does not tolerate objections. But in spite of all treaties, Kyiv refused to fulfill their obligations. Ukraine always demanded lower gas prices, while not paying for current supplies, hoarded debt and $3 billion, which it at the end of 2013 (still under Viktor Yanukovych) has allocated Russia, used for other purposes.

Despite the fact that the participation of Brussels have held numerous trilateral negotiations, a compromise was never found. Ukraine currently buys gas from Russia. It is, as promised, finds the fuel side, for example, in Romania. But the gas is still Russian. He is heading to Ukraine on the reverse. As with pride they say in Kiev, the price of reverse gas from Europe at $20 cheaper, than at “Gazprom”.

But note that the money for the purchase of gas Ukraine is taking Europe on the credit line of the European Bank for reconstruction and development (EBRD). Recall that Ukraine refused to repay the debt to Russia. Then, after the credit rating downgrade “Independence”, the Bank raised the interest rate on allocated funds for such as the Ukraine, States to 18.5%. In other words, by purchasing Russian gas in Europe, Kiev will be forced to return to EBRD at $35 more per thousand cubic meters. In the end, the “reverse” gas is more expensive.

Two years Europe suffered, but now, apparently, reached rock-bottom”. As said first Vice Prime Minister, head of Ministry of economic development and trade of Ukraine Stepan Kubiv, for the successful completion of the winter episode of his country must be pumped into the storage 17 billion cubic meters of gas. There is evidence that these volumes are already uploaded. But that’s what they paid, not a fact. The Ukraine’s budget deficit this year may exceed $2 billion Seems to be not much. But for Kiev, it can be critical. Especially considering that the question of disbursal of a loan from the world Bank, which Kiev was supposed to get to the end of the year, is in limbo.

There is no doubt that Europe is now close to a panic state. Of course, while the fuel from the Old world is. Even has a surplus that he is willing to sell Ukraine. But to give gas credit Brussels is not going to.

We must assume that this is why the Vice-President of the European Commission for energy Union maroš Šefčovič said that the tripartite format of gas talks between Kiev, Brussels and Moscow should be resumed. “In this regard in the coming weeks I look forward to meeting with the Russian authorities”, — said Sefcovic.

It is clear that Europe is afraid that Ukraine next autumn-winter will go again to shut off Russian gas transit, and will have it. But will there be new negotiations successful — to assume difficult. Especially considering that the judicial war “Gazprom” and “Naftogaz” is played. The Ukrainian side makes us claim more than $14 billion This allegedly underpaid the money for the transportation of Russian gas via the territory of the Square in Europe. Russia claims much more — nearly $32 billion This astronomical sum Kiev owed as unpaid gas supplies, and for breach of contract for the supply of “blue fuel”. Both lawsuits — from both “Gazprom” and “Naftogaz” has addressed in Arbitration court of Stockholm. In whose favor the final decision will be passed is not yet clear. The trial gonna go on for years, and the Stockholm decision probably will be appealed in other international bodies. And this is not years, but decades.

The Ukrainian crisis. Chronicle of events

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