Wednesday, December 24, 2008

Gas Impasse....,

Washington Post | Russia and Ukraine appear to be heading for a new collision over natural gas that could disrupt supplies to Europe this winter, with Russia threatening to stop selling the fuel to Ukraine on Jan. 1 if it does not repay more than $2 billion in debt.

Russia called on European nations Tuesday to pressure Ukraine to guarantee the delivery of Russian natural gas to the continent. The appeal, made by Energy Minister Sergei Shmatko, came as negotiators prepared to meet in Moscow in an attempt to resolve the politically tinged standoff.

Russia briefly reduced its supply of gas to Ukraine in March and shut it down for a few days in January 2006. But the latest disagreement could be more severe because the global financial crisis has battered both countries and left them hungry for funds.

Any disruption could affect Europe because Russia supplies as much as a quarter of the gas the continent uses, most of it delivered through pipelines in Ukraine. Analysts say Ukraine could divert gas intended for Europe to satisfy its own needs if Moscow carries out its threat to shut off the supply to Ukraine.

"Europe must be concerned by the decisions made by Ukraine," not by Russia, Shmatko said at a news conference. "Russia will ship and export gas in quantities stipulated in our agreements."

He added that Europe should "exert required pressure" to ensure "guaranteed gas transit."

Russia's state-controlled gas monopoly, Gazprom, set the Jan. 1 deadline for payment of Ukraine's gas debts at a news conference last week, saying Ukrainian officials had informed the company they could not raise any more funds for gas for the rest of the year.

But Ukrainian President Viktor Yushchenko said the country had already paid Russia for gas consumed in the summer and autumn, and the national gas company, Naftogaz, said additional payments were planned.