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Russia: Gazprom Claims Ukraine Is Diverting Gas

Russia's Gazprom has renewed its claims that Ukraine is diverting gas intended for Europe. The charge may be a sign that the gas monopoly's new management will pursue a solution aggressively.

Boston, 7 June 2001 (RFE/RL) -- After a sudden change in leadership at Russia's Gazprom last week, there are already signs that the new era may be much like the old era, as far as Ukraine is concerned.

At a press conference Monday in Moscow, Yuri Komarov, a board member at the Russian gas monopoly, charged that Ukraine has resumed its diversions of gas from transit pipelines that cross the country to Europe.

The news was one of several announcements that followed the replacement last week of longtime chief executive Rem Vyakhirev with Aleksei Miller, a deputy energy minister and loyalist to President Vladimir Putin. Analysts have expected sweeping changes at Gazprom as a result.

But judging by Komarov's statements, many of Gazprom's priorities may remain the same. Komarov, who serves on Gazprom's management committee, predicted that Ukraine would sell 1.5 billion cubic meters of siphoned Russian gas to Poland this year.

The alleged practice is more upsetting to giant Gazprom than the low prices that the company charges for gas sold to CIS states. Komarov said, "That doesn't worry us." He added, "We're worried by re-exports."

The reason for Gazprom's concern about illicit sales is that they compete with its business in Eastern Europe and undercut its price.

Gazprom bases its tariffs on the distance that gas travels, making it more costly as it goes farther west. Ukraine's diversions may shake the whole pricing structure of Russia's vital trade.

That, at least, was the argument that Gazprom made last year, when tensions over diversions and Ukraine's gas debts brought Kyiv to the brink of crisis. Russia's cutoff of gas drove the country to reform its energy sector and increase collections from consumers.

A complete shutdown of Russian gas proved impossible because Gazprom pumps 90 percent of its exports to Europe through Ukraine's pipelines.

Last year, Gazprom acknowledged Kyiv's claim that it had stopped all diversions for about 10 months. Ukraine's gas debt to Russia still stands at some $2 billion, while the extent of its energy reforms remains unclear.

The reasons behind Gazprom's latest complaint are equally murky. Komarov did not explain, for example, how he could predict how much gas would be diverted this year.

But perhaps more remarkable is how fast Gazprom renewed its complaints about diversions after Miller took over at the company. Several explanations seem possible.

The first is that the change in officials may mean no change in Gazprom's policies. The company has spent years trying to gain control of Ukraine's pipelines to solve its transit problems. The campaign may simply be continuing because Gazprom's new leader sees no other choice.

It is also possible that Komarov is pursuing his own agenda in raising the diversion issue. In the past, he has been vocal about the re-export problem.

A third interpretation is that Gazprom may become even more active in pursuing a solution under its new management. The appointment of Miller may be seen as just one of several recent events affecting the issue with Ukraine.

Last week, Russia's former prime minister and past Gazprom chief, Viktor Chernomyrdin, took up his post as Moscow's new envoy to Kyiv.

Russia's representation in Ukraine has arguably never been stronger since independence, at a time when the embattled President Leonid Kuchma has never been weaker. The time could be right for a far-reaching deal.

Also last week, Russian Prime Minister Mikhail Kasyanov visited Poland, seeking an agreement that would allow Gazprom to build a bypass pipeline around Ukraine. Afterwards, Polish President Aleksander Kwasniewski traveled to Kyiv and assured Kuchma that no agreement was reached. But Russian reports insisted that the two sides had selected a route.

If Russia is stepping up its efforts, then Miller could turn out to be the right man for the job. His experience as head of the Baltic Pipeline System makes him familiar with previous Putin strategies for direct export routes that avoid transit countries.

The events in Russia suggest that Ukraine may be poorly prepared to deal with the consequences of gas diversion if Gazprom steps up the pressure for a solution.