Ukraine not risks anything by delaying solution of gas dispute with Russia

Oil&Gas Materials 7 January 2009 17:43 (UTC +04:00)

Azerbaijan, Baku, Jan. 7/ Trend , E. Tanriverdiyeva/ Ukraine does not risk anything by delaying solution of a gas dispute with Russia given European Union's neutral position in this dispute and presence of gas reserves in Ukraine's gas holders.

"Ukraine does not risk anything as it meets part of gas demand through its own production and the other part through the reserves accumulated for this event," Russian expert on economy Mikhail Delyagin said.

Russia's Gasprom suspended gas supplies to Ukraine on Jan. 1 as the country has yet to sign a contract for 2009. According to Gazprom officials, Ukraine began illegal consuming gas transited via its territory to other countries. As a result, last day European consumers received 60 million cubic meters of gas less than expected.

Deputy Gasprom director Aleksandr Medvedev announced that Ukraine shut down the last and fourth gas pipeline which transported transit gas to Europe. Russian gas monopolist stated earlier that from Jan. 1 to 4 Ukraine shut down three gas pipelines which transported Russian gas to Europe via its territory.

Ukraine's Naftagas says that Gasprom completely suspended gas supply to Ukraine Jan. 7.

Russian gas supplies via Ukraine to Bulgaria, Bosnia, Croatia, Macedonia, Serbia, Hungary, Turkey and Greece have been suspended.

Russian observers say Ukraine plays a subtle game deliberately leading to shortage of gas in Europe.

Ukraine steals gas from pipeline not in an attempt to heat homes, said Delyagin, director of Globalization Problems Institute of Russia.

"When there is shortage of gas in Europe, they will skyrocket prices and it will be profitable to resell gas to Europe at roughly $600 per 1,000 cubic meters," Delyagin said to Trend . This will be beautiful and quite reasonable speculative game," he said.

On the contrary, Ukrainian experts say the gas conflict is Moscow's provocation and Gasprom's attempts to compel Europe to invest in construction of a new gas pipeline bypassing Ukraine.

Gasprom deliberately reduces volume of transit gas to discredit Ukraine, Deutshe Welle quoted Mikhail Gonchar, director of energy programs at Ukraine's Nomos Center, as saying.

Gonchar said by doing so Gasprom is striving to discredit Ukraine as a reliable transit country and instigate Europeans construct new gas routes skirting Russia.

"This is economic crisis. Extremely problematic situation Gasprom is caught up does not allow to realize these ambitions and politically motivated projects," expert said.

They can be realized only with the help of European tax payers, he said.

Observers agree that EU takes neutral position in gas dispute between Moscow and Kiev.

EU should support any side, because both sides are, at the same time, right and wrong, Carlo Stagnaro, director of Energy Department of Bruno Leoni Institute of Italy, said.

"It is in the EU's interest to contribute to reach a reasonable, stable, longer-lasting agreement, not to sponsor one side," he said.

Delyagin said Europe will only take its side in Russia-Ukraine gas dispute. "Europeans can not protest against protégés, therefore they will only clasp their hands and ask for a agreement by any means," he said.

Experts argue the gas dispute is less likely to be solved soon.

The entire process is continuous and Ukrainians doe not need to solve it.

Stagnaro believes an agreement will be closed, because it's not in the interest of anybody to keep fighting this way. "However, this year the usual "crisis" has gone much more far than before, and it will raise several questions about the credibility of these "agreements" over time," he said to Trend by e-mail.

Italian expert believes Russia will be able to obtain some increase in the gas price to Ukraine, but not too much.

"Gas prices will keep falling in 2009, so the gap between market prices and prices for Ukraine will shrink," Stagnaro said.

R. Agayev (Moscow) and A.Badalova (Baku) contributed to this article.

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