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Author`s name Dmitry Sudakov

Russia, Ukraine, Europe and gas

The comedy drama with the Russian natural gas and the Ukrainian gas transmission system continues. The Russian gas has been lost somewhere in the middle of Ukrainian nowhere, whereas the Ukrainian administration continues to blame Russia and itself for what has been happening in the country lately. Ukraine can not purchase gas at market prices, and Russia can not sell it at a sacrifice. Europe suffers most from the crisis in severe weather conditions and dreams about cheap natural gas from Asia, which Russia has already bought over their head.

Ukraine began to steal Russia’s natural gas in the very beginning of the New Year since the country had not signed the contract with Russia’s gas giant Gazprom for 2009. As a result, European customers of the Russian gas had to face severe problems against the background of the unusually cold winter of 2009.

It seemed that Mirek Topolanek, the Prime Minister of the Czech Republic, the chairing EU state at the moment, and the head of the European Commission, Jose Manuel Barroso, did their best to settle the conflict and inundate Europe with gas. However, the fuel did not make it there. Ukraine violated a number of agreements and did not let Russian specialists access its gas transmission objects.

Ukraine apparently suffers from a very serious political crisis. Spokespeople for the nation’s authorities were trying to explain the current state of affairs with contradictory statements. Naftogaz, Ukraine’s natural gas corporation, said that it had no technical gas to pump the fuel from underground reservoirs, and so the country asked for it from Russia. “We have no technical capability to pump gas from underground reservoirs. Lend us your gas, and we will settle accounts with you,” Naftogaz chairman Oleg Dubina said. It is worthy of note that the word ‘dubina’ literally translates from Russian as ‘crack-head’.

On the one hand, Ukraine did not let the Russian gas reach its European customers. On the other hand, Ukrainian top officials stated that the amount of gas, which the country had accumulated (stolen), would be enough for a whole year, not just for one day of pumping.

Oleg Dubina eventually acknowledged that it was up to Ukraine , not Russia, to provide the technical guarantee for the gas transit, as Kiev previously said. Gas Princess Yulia Tymoshenko calculated possible losses from such an initiative and rejected her recent statement to strike a mean blow on her prime rival in the distribution of the Russian gas – Ukrainian President Viktor Yushchenko.

Now, as it turns out, the Russian gas in the Ukrainian gas transmission system is not enough to pump it through. However, as it was mentioned above, Ukraine’s gas reserves were more than enough to achieve the goal. It is not known what stops Ukraine from executing its obligations as a gas-transiting nation, but it is obvious that the country does not abide by its contractual obligations.

Yulia Tymoshenko had to have an unpleasant meeting with the Prime Minister of Slovakia Robert Fico on Wednesday morning. Tymoshenko made the official delegation wait for an hour, which disturbed both the Slovak officials and the Slovak media. Fico told Tymoshenko that his nation was in a critical situation, for the nation’s gas reserves were enough for less than two weeks. He added that Europe was not interested in the problems of relations between Russia and Ukraine. Europe is only interested in the resumption of the gas transit, he said.

Kiev then put forward a “remarkable” solution of the problem. Ukraine wanted Russia to give away over 1.5 billion cubic meters of gas during the first three months of 2009 with no payment in return whatsoever. “They offered us to give away $700 million to resume the transit,” Gazprom chairman Aleksei Miller said.

Prime ministers of Moldavia , Bulgaria and Slovakia arrived in Moscow for talks with Vladimir Putin. Afterwards, the officials left for Gazprom’s headquarters and then to President Medvedev. Ukraine’s negligence causes serious damage to the three countries: school classes have been canceled there because of cold, many enterprises had to stop working because of the fuel shortage.

Putin said that Ukraine must provide technical conditions for the transit. “We can hear our Ukrainian colleagues saying that there are problems, but those are not our problems, but the problems of the transit country,” Putin said.

Putin described the current conflict as a “dispute about the deliveries, conditions and prices of natural gas shipments to Ukraine .” He added that Russia’s European partners became hostages of the dispute and urged the European Commission to show adequate influence on Kiev.

Russia has already suffered the damage of 1.1 billion dollars since the beginning of the year because of the gas conflict with Ukraine.

“The country can not lose such money. We’ve run out of gifts. The funds must be collected from those guilty of the current situation,” President Medvedev said. He put forward a suggestion to hold an emergency gas forum in Moscow January 17 and invited Ukraine ’s Viktor Yushchenko to participate.

In the meantime, the EU Commission President, Jose Manuel Barroso, said that Russian and Ukrainian gas companies may have to deal with lawsuits filed against them by their European partners. The official urged the feuding parties to look for alternative ways of fuel deliveries and did not say a word of whether he was going to show pressure on the Ukrainian administration.

As for the alternative ways and sources of fuel deliveries, things look black. Gazprom overbought the natural gas of Asian countries. In addition, gas reserves of Azerbaijan, for example, would be enough for Turkey only at best.

Sergei Balmasov, Vadim Trukhachev

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