No cut offs to Europe for New Year

The European Union may get all in wants for Christmas this year as a repeat of the January 2009 Russian-Ukrainian gas crisis seems unlikely this holiday season. Oleh Dubina, chairman of Ukraine’s state-owned Naftohaz Ukraina energy company, was quoted as saying by the press that Russian natural gas supplies will flow uninterrupted to European consumers at the beginning of 2010.
“This year we are going to meet the New Year at home,” Interfax quoted Dubina as saying. “There will be no conflicts with Russia.”
Contract negotiations between Moscow and Kiev on gas delivery terms broke down in December 2008, leading to a blockade of Russian natural gas deliveries to Ukraine for the first three weeks of 2009. The shut off dramatically reduced overall Russian gas volumes reaching Europe, and forced retail price spikes as far away as Spain.
A repetition of the conflict, the worst interruption of Russian energy supplies to Europe since the break-up of the Soviet Union, was now impossible because of on-time payments by Ukraine to Russia for gas, and an effective contract covering natural gas deliver terms for 2010, Dubina said. “Everything will be quiet,” he said. “We have 100 per cent of the contracts we need,” he said. “We will supply the country with 100 per cent of its gas needs.”
Ukrainian consumers would be protected this winter season from severe price fluctuations by reserves of 25 billion cubic meters of Naftohaz gas already stored in underground reservoirs, Dubina said.
Dubina’s comments came in the wake of talks last week between Russian Prime Minister Vladimir Putin, and Ukrainian Prime Minister Yulia Tymoshenko, on energy issues.
Putin gave critical support on 20 November to hopes for stable natural gas deliveries to Europe and praised Tymoshenko for her manner in negotiating the energy problems despite “all the difficulties.” “She (Tymoshenko) is a tough negotiator,” Putin said, as a smiling Tymoshenko looked on. “But we have always been able to agree, and, in spite of all the difficulties, we have managed to keep to all our commitments,” he added.
Putin made the approving comments at a televised press conference on 19 November evening in the Ukrainian city of Yalta. Putin and Tymoshenko met in the Black Sea port for talks on energy and other bilateral issues.
During the January 2009, Putin claimed that Ukraine was siphoning Russian gas destined for Europe and not paying for it. This was now a non-issue, Putin said. “Ukraine is fulfilling all of its obligations,” he said. “We hope to meet the New Year without any problems.”
Tymoshenko also seemed to indicate that energy disputes with the Kremlin were now in the past, and promised Russian natural gas supplies to Europe would not be interrupted. “We fully and thoroughly will fulfill our obligations on gas transit,” she said. “We have always met our responsibilities.”
On 19 November, Ukrainian President Viktor Yushchenko, who is increasingly unpopular in Moscow due to his pro-Western policies, dispatched an open letter to Russian President Dmitry Medvedev, warning that Ukraine’s economic crisis necessitated revisions in the two countries’ gas accords, including a sharp increase in transit fees.
But Kremlin official Sergei Prikhodko responded harshly, saying Yushchenko’s letter “is something from the sphere of political blackmail” and rejecting any concessions. The next day, Putin handed Tymoshenko almost exactly the package of concessions that Yushchenko had called for.
“Yushchenko is out of the game,” says Andrei Klimov, deputy chair of the Russian State Duma’s foreign affairs committee. “Yushchenko has never been an advocate of Russian-Ukrainian cooperation, and it would probably be better if someone else sat in his place… Tymoshenko has shown that cooperation is possible, if there is realism. This (Putin-Tymoshenko) accord shows that realism can bring good results.”
Though Putin insisted he was not trying to influence Ukraine’s elections, he offered lavish praise for the former “Orange Revolution” hero, Tymoshenko.
Ukraine’s economy has been one of the world’s hardest-hit by the international financial crisis, and Tymoshenko’s government has struggled to make monthly payments to Russia for natural gas deliveries. Failure to do so would a force another switch off of gas supplies, according to the Kremlin.
Kiev only managed to pay the October bill with hours left on deadline, by tapping into limited foreign currency reserves. “I hope the payments continue in the future,” Putin said.
Representatives of the two countries’ state-owned natural gas companies on 19 November signed a contract setting out planned volumes of Russian natural gas shipments to Ukraine and Europe for 2010. The contract would take into consideration “economic realities,” and Russia would not necessarily insist Ukraine consume all gas it contracted for, Interfax quoted Viktor Chernomyrdin, former Russian ambassador to Ukraine, as saying. Besides gas, talks in Yalta on 20 November between Russian and Ukrainian officials addressed cooperation in nuclear energy technologies, according to a Korrespondent web magazine report.