Wednesday, October 1, 2014
FAIRFIELD-SUISUN, CALIFORNIA
99 CENTS

Russia cuts gas supply to Ukraine as tensions soar

By
June 18, 2014 |

MOSCOW —€” Russia halted natural gas deliveries to Ukraine on Monday, spurning Ukraine’s offer to pay some of its multibillion-dollar gas debt and demanding upfront payments for future supplies.

The decision, coming amid deep tensions over eastern Ukraine, provoked strong words from both sides but does not immediately affect the crucial flow of Russian gas to Europe. Ukraine has enough reserves to last until December, according to the head of its state gas company Naftogaz.

Still, the Russian move could disrupt Europe’s long-term energy supplies if the issue is not resolved, analysts said. Previous gas disputes left Ukraine and some Balkan nations shivering for nearly two weeks in the dead of winter.

The gas conflict is part of a wider dispute over whether Ukraine aligns itself with Russia or with the 28-nation European Union and comes amid a crisis in relations following Russia’s annexation of Ukraine’s Crimean Peninsula in March. Ukraine accuses Russia of supporting an armed separatist insurgency in its eastern regions, which Russia denies.

Ukraine’s new president, meanwhile, said Monday that he will propose a detailed peace plan this week that includes a cease-fire with the separatist rebels. But before that happens, the armed forces must secure control over Ukraine’s porous border with Russia, President Petro Poroshenko said at a meeting of his national security council.

“As soon as the border is closed, we can immediately declare a cease-fire,” he said. “Declaring a cease-fire while the border is open would be irresponsible.”

There was no immediate response from the separatists to Poroshenko’s comments.

Ukraine, one of the most energy inefficient countries in Europe, has been chronically behind on payments for the Russian natural gas needed to heat its homes and fuel its industries. In addition, Russia had been giving its neighbor cut-rate sweetheart deals on gas for various political reasons, a practice that came to a halt April 1.

Russia had demanded $1.95 billion by Monday for past-due bills. At talks over the weekend in Kiev, Ukraine was ready to accept a compromise of paying $1 billion now and more later, but Russia rejected the offer, the European Commission said.

Sergei Kupriyanov, spokesman for Russian gas giant Gazprom, said since Ukraine missed the deadline, from now on it had to pay in advance for energy. Yet that’s a nearly impossible demand for the cash-strapped nation, which is fighting an insurgency and investigating possibly billions lost to corruption under its former pro-Russian president, Viktor Yanukovych.

EU member states got 24 percent of their gas in 2012 from Russia, according to industry association Eurogas, and about half of that goes through the pipelines across Ukraine. In 2013, Ukraine imported nearly 26 billion cubic meters of gas from Russia, just over half of its annual consumption.

Kupriyanov said Russian gas supplies for Europe will continue through Ukrainian pipelines as planned and warned Ukraine to make sure they reach European customers.

Analyst Tim Ash at Standard Bank PLC said Ukraine could in theory simply take what it wants, since gas deliveries in the pipelines are intermingled. That would result in a shortage in gas to Europe that could hinder building up enough stored gas ahead of the critical winter heating season.

“This is unlikely to bring a short-term hit to gas supply in Europe, but it will build up problems for the winter unless a deal is reached quickly,” he said in an email.

Bulgaria gets 89 percent of its gas from Russia, while Slovakia gets 83 percent and Hungary 80 percent, while Poland, Austria and Slovenia get 59 percent, 60 percent and 60 percent, according to Eurogas figures.

At a news conference in Moscow, Gazprom CEO Alexei Miller berated the Ukrainian government, saying it scoffed at compromise and was deliberately turning commercial negotiations into a political discourse.

“Ukraine will get as much gas as it pays for,” Miller said Monday. “The risks to the (gas) transit are there and they’re significant.”

He said that in order to prevent serious disruptions to energy supplies in the winter, Ukraine needs to pump in gas to its underground storages before mid-October. The current amount of gas in storage is not enough for Europe to last through the winter, he said.

In Kiev, Ukrainian Prime Minister Arseniy Yatsenyuk angrily rejected the Russian position, putting Gazprom’s move on par with the annexation of Crimea and the pro-Russia insurgency in eastern Ukraine.

“We won’t subsidize Gazprom,” he said. “Ukrainians will not take $5 billion per year (out of their pockets) to let Russia spend this money on weapons, tanks and planes to bomb Ukrainian territory.”

Gazprom had tolerated the late payments but now says Ukraine owes a total of $4.458 billion for gas from last year and this year.

In December, Russia offered Yanukovych a discounted price of $268.50 per thousand cubic meters after he backed out of an economic and political agreement with the EU. But Russia annulled all price discounts after Yanukovych was chased from power in February following months of protests, raising the gas price to $485 per thousand cubic meters starting April 1.

Russia has offered a future price of $385, the price that Ukraine was paying until December, but Kiev has insisted on a lower price. Miller scoffed at that demand, saying it was significantly below European market prices.

In Washington, U.S. State Department spokeswoman Jen Psaki said the EU was working with both sides to broker a “commercially competitive compromise that addresses a market price and payments.”

“The EU, in our view, has put forward a fair and a reasonable compromise that Ukraine has accepted, and we urge Russia to re-engage on this basis,” she told reporters.

Ukraine’s energy minister, Yuriy Prodan, said Ukraine was prepared for the Russian cutoff.

“We are providing reliable transit of gas and supplies to domestic consumers,” he said.

In a related case, Gazprom announced Monday that it is suing Naftogaz in an international court for the $4.5 billion. Naftogaz said it has also filed a suit against Gazprom, seeking a “fair and market-based price” for gas, as well as a $6 billion repayment for what it said were overpayments for gas from 2010.

EU spokeswoman Sabine Berger said EU energy commissioner Guenther Oettinger remained committed to helping broker a deal between Kiev and Moscow.

One reason for EU involvement is the current state of Ukrainian gas reserves. Berger said they now stand at around 13.5 billion cubic meters but need to be at 18-20 billion cubic meters at the end of the summer for Europe to have enough gas this winter.

Ukrainian consumers, however, will be facing higher prices no matter what Russia does. Previous governments had sold gas to consumers at about a fifth of what Naftogaz pays for it — leaving little incentive to conserve and saddling the government with huge deficits.

Ukraine’s new government is in the process of raising domestic gas prices, a condition of its $17 billion bailout loan from the International Monetary Fund.

The Associated Press

The Associated Press

LEAVE A COMMENT

Discussion | No comments

The Daily Republic does not necessarily condone the comments here, nor does it review every post. Read our full policy

.

Solano News

 
 
Middle school students put school candidates on the hot seat

By Susan Winlow | From Page: A1 | Gallery

 
Solano focuses on rail safety

By Barry Eberling | From Page: A3, 1 Comment

 
 
Booz and Brewz benefit for the Blue Star Moms

By Amy Maginnis-Honey | From Page: A4

Police search for missing man

By Glen Faison | From Page: A4 | Gallery

 
Travis airman killed in motorcycle accident

By Ian Thompson | From Page: A5

 
Caltrans cancels nighttime Highway 37 closures

By Barry Eberling | From Page: A5

Salvation Army gears up for annual Red Kettle campaign

By Amy Maginnis-Honey | From Page: A5, 1 Comment | Gallery

 
Blessing of the animals slated Sunday

By Amy Maginnis-Honey | From Page: A5, 2 Comments

 
Theaters primed for bevy of new movies

By Amy Maginnis-Honey | From Page: A7

Fairfield police log: Sept. 29, 2014

By Susan Hiland | From Page: A9, 2 Comments

 
Suisun City police log: Sept. 29, 2014

By Susan Hiland | From Page: A9

Fairfield police log: Sept. 27, 2014

By Glen Faison | From Page: A9, 2 Comments

 
Suisun City police log: Sept. 28, 2014

By Glen Faison | From Page: A9

Suisun City police log: Sept. 27, 2014

By Glen Faison | From Page: A9

 
Fairfield police log: Sept. 28, 2014

By Glen Faison | From Page: A9, 2 Comments

4-H Achievement Night honors county members

By Susan Winlow | From Page: A10

 
Measure A committee plans weekend precinct walk

By Susan Winlow | From Page: A10

 
FBI announces reward for Vacaville bank robber

By Jess Sullivan | From Page: A10

American Legion seeks Korean War veterans for award

By Susan Hiland | From Page: A10

 
Third Annual Ride to Defeat Diabetes is Sunday

By Susan Hiland | From Page: A10

.

US / World

Forest areas reopen after huge fire

By The Associated Press | From Page: A6

 
Hong Kong leader refuses to meet with protesters

By The Associated Press | From Page: B7

Secret Service chief on hot seat for WH breach

By The Associated Press | From Page: B7

 
Afghan pact signed amid questions on Iraq pullout

By The Associated Press | From Page: B7

Government confirms first case of Ebola in US

By The Associated Press | From Page: A9

 
Mayor of suburban Los Angeles city killed

By The Associated Press | From Page: A9, 1 Comment

Crash, suspicious device lead to 101 closure in LA

By The Associated Press | From Page: A9

 
Gov. Brown governor vetoes ethics bills

By The Associated Press | From Page: A9, 6 Comments

Police on manhunt find pipe bombs in woods

By The Associated Press | From Page: A9

 
Oklahoma man charged with murder in beheading

By The Associated Press | From Page: A9

Luck, instinct determined fates of volcano hikers

By The Associated Press | From Page: A9

 
California becomes first state to ban plastic bags

By The Associated Press | From Page: A11, 6 Comments

Bay Area looks to expand overnight transit options

By The Associated Press | From Page: A12

 
Gov. Jerry Brown signs California gun restriction

By The Associated Press | From Page: A12, 13 Comments

.

Living

Today in History: Oct. 1, 2014

By The Associated Press | From Page: A2

 
Community Calendar: Oct. 1, 2014

By Susan Hiland | From Page: A2

 
Horoscopes: Oct. 1, 2014

By Holiday Mathis | From Page: B5

One simple slicing trick to bake a beautiful tart

By Sara Moulton | From Page: B6

 
The flavor of fall – pumpkin pie in a cinnamon bun

By The Associated Press | From Page: B6, 1 Comment

 
.

Entertainment

TVGrid

By Daily Republic Syndicated Content | From Page: A5

 
Morgan: ‘Can’t believe’ Walmart blaming him

By The Associated Press | From Page: A7

.

Sports

Royals beat A’s 9-8 in 12 in AL wild-card thriller

By The Associated Press | From Page: B1 | Gallery

 
Local report: Rodriguez volleyball team downs Armijo

By Daily Republic staff | From Page: B1

Pirates’ Volquez looks to continue revival against Giants

By The Associated Press | From Page: B1 | Gallery

 
Raiders make Tony Sparano interim coach after firing Allen

By The Associated Press | From Page: B1

 
Government: NFL TV ‘blackout’ rule unsportsmanlike

By The Associated Press | From Page: B2

Olympian Michael Phelps apologizes for DUI arrest

By The Associated Press | From Page: B2

 
Gravely injured Giants fan sues Dodgers again

By The Associated Press | From Page: B2, 1 Comment

Ex 49ers RB James agrees to terms with Dolphins

By The Associated Press | From Page: B2

 
FCC will consider petition to ban ‘Redskins’

By The Associated Press | From Page: B2

 
Training camp essential for NBA’s new head coaches like Warriors’ Kerr

By The Associated Press | From Page: B2 | Gallery

No. 14 Stanford trying to jolt stagnant offense

By The Associated Press | From Page: B2

 
NC State coach apologizes for fake injury remarks

By The Associated Press | From Page: B2

NFL says Abdullah should not have been penalized

By The Associated Press | From Page: B2

 
NFL has laundry list of verboten celebrations

By The Associated Press | From Page: B2

49ers’ Wilhoite filling the injury void at linebacker

By The Associated Press | From Page: B8 | Gallery

 
.

Business

EU says Apple gets illegal tax benefits in Ireland

By The Associated Press | From Page: A9

 
Could a merger follow the PayPal-eBay split?

By The Associated Press | From Page: A9

.

Obituaries

Clara May Clift Triplett

By Daily Republic staff | From Page: A4, 3 Comments

 
David Earl Butenhoff-Forristall

By Nancy Green | From Page: A4, 1 Comment

Marte Abad Lubag

By Nancy Green | From Page: A4

 
.

Comics

Wizard of Id

By Daily Republic Syndicated Content | From Page: B4

 
Dilbert

By Daily Republic Syndicated Content | From Page: B4

Beetle Bailey

By Daily Republic Syndicated Content | From Page: B4

 
Rose is Rose

By Daily Republic Syndicated Content | From Page: B4

Frank and Ernest

By Daily Republic Syndicated Content | From Page: B4

 
Sally Forth

By Daily Republic Syndicated Content | From Page: B4

Peanuts

By Daily Republic Syndicated Content | From Page: B4

 
Blondie

By Daily Republic Syndicated Content | From Page: B4

B.C.

By Daily Republic Syndicated Content | From Page: B4

 
Pickles

By Daily Republic Syndicated Content | From Page: B4

Garfield

By Daily Republic Syndicated Content | From Page: B4

 
Get Fuzzy

By Daily Republic Syndicated Content | From Page: B4

Baby Blues

By Daily Republic Syndicated Content | From Page: B4

 
For Better or Worse

By Daily Republic Syndicated Content | From Page: B4

Baldo

By Daily Republic Syndicated Content | From Page: B4

 
Zits

By Daily Republic Syndicated Content | From Page: B4

Crossword

By Daily Republic Syndicated Content | From Page: B5

 
Cryptoquote

By Daily Republic Syndicated Content | From Page: B5

Sudoku

By Daily Republic Syndicated Content | From Page: B5

 
Bridge

By Daily Republic Syndicated Content | From Page: B5

.

Breast Cancer Awareness 2014

Breast cancer in younger women

By Green Shoot Media | From Page: BCA2

Talking with your doctor

By Green Shoot Media | From Page: BCA3

Breast cancer myths

By Green Shoot Media | From Page: BCA4

Diet linked to cancer

By Green Shoot Media | From Page: BCA9

Giving emotional support

By Green Shoot Media | From Page: BCA10

After the treatment

By Green Shoot Media | From Page: BCA12

Join the fight: Get involved

By Green Shoot Media | From Page: BCA15