European Gas Crisis | The Revival

Salaam

This is getting very interesting.

Some background: Russia sells cheap gas to forver soviet countries that toe its line. Ukraine used to, but since 2004 has become more west-centric.

Russia used to sell gas at £50.00 for 1000 cubic metres, but has demanded the 'market price' of £230.00, which is over 4 times as high. The price was to be effective new years day. Ukraine refused to pay anything above £80.00. Russia has noe severed its gas pipelines supplying Ukraine. Ukraine needs gas. But if it gets it from elsewhere, it would have to pay the market price, which it has already refused to do.

Approximately 25% of the whole EU gas coes from russia. The majority through Ukraine. Those pipeliones remained open, but their pressure has dropped. It is suggested that Ukraine is siphoning some gas off for themselves.

[quote="[url=http://news.bbc.co.uk/1/hi/world/europe/4574630.stm]BBC News[/url]"][size=18]Ukraine 'stealing Europe's gas'[/size]

Russia has accused Ukraine of stealing $25m of gas exports destined for Europe after it cut off supplies to the country on Sunday.

Some European states say supplies from a pipeline running through Ukraine have fallen by up to 40%.

Ukraine denied taking the gas, but said it would indeed siphon off a share if temperatures fell below freezing.

The row erupted after Russia raised the price of 1,000 cubic metres of gas from $50 to $230 and Ukraine refused to pay.

Russia is still charging the lower price to some former Soviet countries, though the average price in the EU is $240.

Moldovan President Vladimir Voronin said his country had also been cut off, after refusing to pay $160 per 1,000 cubic metres, according to the Itar-Tass news agency.

Kiev says it is being punished for its attempts to become more independent from Moscow and develop stronger ties with the West.

In a statement on Sunday night, it accused Russia of resorting to "blackmail" in order to undermine the country's economy.

[b]German warning[/b]

Both the European Union and the United States have expressed concern about the row.

Germany, which depends on Russia for 30% of its supplies, on Monday called on Moscow to "act responsibly".

Alexander Medvedev, deputy head of Russian gas monopoly, Gazprom, said Ukraine had stolen 100 million cubic metres of gas on 1 January.

"If the theft continues at this pace, the volume and cost of the stolen goods will rise quite considerably," he said.

Ukraine's Fuel and Energy Minister Ivan Plachkov said there had been no "unauthorised diversion" of gas.

But he said Ukraine had the right under existing contracts to take a share of gas exported via the Ukrainian pipeline - the main route for Russian exports - and would do so if the temperature fell below -3C.

He also said that Ukraine was currently relying on gas from Turkmenistan and its own reserves.

But Gazprom, which controls the pipeline linking Turkmenistan and Ukraine, said no Turkmen gas was entering the country.

"Today the Ukrainian gas transporting system is receiving nothing but Russian gas," Mr Medvedev told journalists in Moscow.

[b]Supplies falling[/b]

Gazprom supplies about 25% of Western Europe's needs.

Austria, Hungary, Poland and Slovakia have reported a sharp fall in supplies, and have said they will in turn be pumping less gas to customers further down the line.

Experts say Germany could be affected soon.

Austrian, Romanian and Slovak authorities said supplies from Russia were down by about one third, while Hungarian gas firm MOL said its supplies were down by 40%.

Ukraine says the loss of Russian supplies will not hit ordinary Ukrainian consumers, but has warned that industry could be affected.

The Ukrainian Foreign Ministry says Russia is in breach of contract by cutting off the gas and has called for a resumption of talks in the presence of international experts.

It says Ukraine is ready to agree to an increase in gas prices, if this is phased in gradually.

Relations between Russia and Ukraine have been tense since President Viktor Yushchenko came to power last year on a promise to strengthen relations with the EU and Nato, and steer the country out of Russia's sphere of influence.

[/quote][url=http://news.bbc.co.uk/1/hi/world/europe/4574630.stm]BBC News[/url]

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