Ukraine Aims to Calm Fears of Natural Gas Disruption for EU

Articles — By forcechange on January 2, 2009 10:10 am

As the Russian halt of natural gas deliveries intended for Ukraine entered its second day, Ukrainian officials began touring European capitals to provide reassurances that transport of natural gas through Ukraine to the rest of Europe would continue.  Since almost all natural gas delivered from Russia to EU countries must travel through Ukraine, concerns have been raised that Ukraine might divert some of that gas for its own use.  This is what happened the last time Russia halted natural gas deliveries to Ukraine in 2006.

However, Ukraine asserts that it has enough natural gas reserves to last it through the winter, and regardless, will continue to permit transit of all Russian natural gas through its country to the EU.

While Ukrainian President Viktor Yushchenko has stated a compromise will be reached soon with Russia, Gazprom’s chief executive Alexei Miller quashed these hopes by saying that Ukraine would have to pay $418 per 1,000 cubic meters of gas in 2009, which would be more than double last year’s price.  Highlighting the contentious nature of the situation, this offer was an increase from the $250 price that Russia offered Ukraine just last week.  Ukraine paid $179.50 for Russian gas in 2008, which was well under the price paid by EU countries for the same product.

This dispute continues to highlight the dangers of being too dependent on a foreign country for one’s energy resources.  Currently, around 25% of the natural gas used in the EU comes from Russia, most of which is pumped in pipelines that pass through Ukraine.

Via: AFP (link may expire)