Gazprom threatens Ukraine supplies

Russian company's threat could affect gas distribution to Europe.

    Experts say Gazprom's pressure is in support of Ukraine's prime minister, Viktor Yanukovich [AFP]
    No clear winner has yet emerged between the pro-Western president, Viktor Yushchenko, and the prime minister Viktor Yanukovich, from Ukraine's Russian-speaking east.
     
    Some analysts interpreted Gazprom's statement on Tuesday as a message of support for Yanukovich.
     
    A spokesman for Gazprom's export arm, Gazpromexport, Ilya Kochevrin, denied the move was politically motivated.

    "We did not want to bring this issue before and during the elections to avoid accusations that we try to politicise the issue and influence the results," he said.

    Gazprom warning

    Andre Andrijnovs at ING in London said Ukraine's rival political forces could both benefit from Gazprom's warning.

    "Both camps can play this as a card. One side can say that Gazprom is trying to play with Ukraine and alter the election outcome, and Yanukovich can use it to his advantage as well by saying under his control things went smoother," he said.

    The European Commission urged Gazprom and Ukraine to resolve the issue quickly and said Gazprom had promised to honour all existing gas supply commitments to European companies.

    "The commission was informed by Gazprom about a problem of payments for gas delivered to Ukraine and a possibility to reduce gas deliveries to Ukraine if no satisfactory solution was found.

    "The commission urges to find a speedy settlement for this issue."

    Debt redemption

    Supplies to some EU countries fell by as much as 20 per cent for a few days in January 2006 after Gazprom and Ukraine failed to agree on the price of Russian gas imports.

    Ukraine has failed to pay debts for deliveries on a number of occasions over the past decade, but Tuesday's statement was the first mention of any new debt in recent months.
     
    "Gazprom has repeatedly raised the issue of a quick gas debt redemption with Ukrainian colleagues," it said in a statement.

    Gazprom currently sells gas to Ukraine at $130 per 1,000 cubic metres or around half its export price to Europe. Both sides have yet to agree on prices for 2008.

    SOURCE: Agencies


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