Russia's state-run natural-gas monopoly Gazprom announced earlier today that it was increasing the amount of gas shipped through pipelines in Ukraine to assure full deliveries to customers in European countries. Gazprom has since said that supplies to European customers were back to normal.
Austria and Hungary, which had suffered supply cuts of up to 40 percent after Gazprom cut the flow to Ukrainian customers on 1 January, have announced the full restoration of deliveries from Russia.
Accusations Of Theft
Gazprom representatives also reiterated their claim -- denied by Kyiv -- that Ukraine was siphoning off gas intended for European customers.
Gazprom Deputy Chairman Aleksandr Medvedev said the current situation could not continue. "Maintaining this situation would be the same as encouraging Ukraine to steal our gas on the way to Europe.” Medvedev said. “So all of our European partners have been warned that we are doing the maximum to maintain gas supplies to Europe. The responsibility for a possible break in supply lies completely with the Ukrainian side."
Eduard Zanyuk, a spokesman for Ukraine's state-gas monopoly Naftohaz Ukrayiny, denied the siphoning allegations.
"The fact that Gazprom's management is lying is obvious," Zanyuk said. "Unsanctioned siphoning of gas ended already at the time when [current President] Viktor Andiyovych Yushchenko was prime minister [1999-2001]."
Meanwhile, Russian Prime Minister Mikhail Fradkov called on the European Union to put pressure on Ukraine to ensure that full supplies of Russian natural gas transit to European countries.
Gazprom-Naftohaz Meeting Planned
The standoff was sparked by demands by Gazprom for Ukraine to start paying $230 per 1,000 cubic meters of gas -- a more than fourfold increase over the $50 Ukraine has been paying.
Gazprom's Medvedev said that Russian and Ukrainian gas officials were due to meet later today to discuss the pricing dispute. A spokesman for Naftohaz Ukrayiny confirmed the meeting was scheduled.
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- Ukraine consumes 70 billion cubic meters (bcm) of gas per year. It produces 20 bcm of its own gas, has a signed contract to import 40 bcm from Turkmenistan, and in 2005 was getting 29 bcm from Russia as payment for transit of Russian gas.
- Ukraine sells some 7 bcm of gas a year to the West and places some in underground storage facilities. These facilities can hold 34.5 bcm.
- Ukraine is the sixth-largest consumer of gas in the world and uses more gas than Poland, the Czech Republic, Hungary, and Slovakia combined.
- Russia has proven gas reserves of 47 trillion cubic meters (tcm) -- the largest in the world ahead of Iran and Qatar.
- Russia sells approximately 160 bcm to Europe each year. By 2015, Europe is expected to import 300 bcm, or 40 percent of its projected needs from Russia.
- Russia's Gazprom is the world's largest gas company. It is the only company allowed by Russian law to export gas outside the borders of the CIS. It also owns the gas-transportation system and most of the gas fields in Russia.
- The Russian state is Gazprom's majority shareholder , with a 51 percent share. The company's ownership rights changed as of the beginning of 2006, with Gazprom stock being sold on the open market. The Russian state, however, will continue to hold the majority stake.