/ 31 December 2008

Gazprom accuses Ukraine of ‘blackmail’ on gas transit

Russian state gas monopoly Gazprom accused Ukraine on Wednesday of “blackmail,” saying it had threatened to confiscate Russian gas en route to delivery to customers in Europe.

“We are in a situation when transit volumes to Western Europe are in danger,” Gazprom’s deputy chief executive, Alexander Medvedev, said at a news conference. “This position cannot be called anything but blackmail.”

He confirmed that a payment of $1,5-billion made late on Tuesday by Ukraine in partial payment of its gas arrears to Russia had been received, but indicated that the payment dispute was far from resolved.

“Frankly speaking, it is incomprehensible how we even got to this point,” Medvedev said.

During the news conference, Medvedev and Gazprom spokesperson Sergei Kupriyanov held up a paper they said was a letter from the head of Ukraine’s state gas company, Naftogaz, stating that Ukraine could re-route gas meant for Europe.

The contents of this letter could not immediately be verified independently. Ukraine’s political leadership and top energy officials have so far insisted that Ukraine would guarantee transit of all Russian gas to Western Europe.

Kuprianov described the alleged threat from Ukraine to confiscate gas as “unprecedented” in the history of international energy relations.

He put the chances of a “crisis scenario” — understood to mean a cut-off of Russian gas shipments to Ukraine — at 70% in favour, with a 30% chance that the issue could be resolved to everyone’s satisfaction before midnight.

Kuprianov said Ukraine’s handling of the dispute in past few days had produced “a whole layer of complex issues” that did not previously exist and that now needed to be resolved within hours to avert a gas cut-off.

Ukraine’s behaviour “is extremely worrying to us”, he said.

Russia had demanded that Ukraine pay in full for the gas it imported from Russia in November and December, an amount it puts at about $1,6-billion, as well as fines for late payment totalling $450-million.

Failure to pay the entire amount by the end of December 31 would force Gazprom to shut off gas supply to Ukraine, Russian officials have warned. — AFP