Old Saint Basil's Cathedral in MoscowJohnson's Russia List title and scenes of Saint Petersburg
Excerpts from the JRL E-Mail Community :: Founded and Edited by David Johnson
#5 - JRL 2009-9 - JRL Home
Russia wants EU gas flow via Ukraine resumed on acceptable terms

MOSCOW, January 14 (RIA Novosti) - Russian President Dmitry Medvedev urged Gazprom CEO Alexei Miller to do everything possible to resume the flow of Russian gas through Ukraine, but only on conditions acceptable to Moscow.

"I am asking you to stay in continuous contact with both our Ukrainian colleagues and gas transit authorities, and spare no effort to ensure that gas transits be resumed on conditions that are acceptable to Russia and Gazprom," Medvedev said.

He added that "there will be no freebies" for Ukraine.

The president instructed Miller to recover $1.1 billion in estimated losses from Ukraine, caused by the gas dispute with Kiev.

"Since January 1, Gazprom has incurred losses of $1.1 billion under export contracts on gas supplies to Europe," Medvedev said.

But a Russian deputy prime minister said later Gazprom's losses sustained over Ukraine's refusal to transit Russian gas to Europe have reached $1.2 billion.

"As of today, the losses have reached $1.2 billion," said Igor Sechin, who supervises Russia's fuel and energy sector in the cabinet.

Ukraine's national energy company Naftogaz has asked Gazprom to provide 1.5 billion cubic meters of gas to ensure that gas is transited to the EU, Miller said.

"In other words, they proposed we give $700 million just to resume supplies," he said.

Gazprom gave the go-ahead on Tuesday morning to resume pumping gas via Ukraine but no gas got through to Europe, causing Moscow to accuse Kiev of blocking the gas transits.

Moscow has said Ukraine's Naftogaz energy company has no reason to refuse to transit Russian gas to Europe.

Naftogaz head Oleh Dubyna said his company was unable to meet Gazprom's proposal to transit 76 million cubic meters to Europe since the route selected by the Russian energy giant would disrupt gas supplies to Ukrainian consumers, specifically in the Odessa, Luhansk, Donetsk and Dnipropetrovsk regions.

Ukrainian President Viktor Yushchenko denied on Tuesday that Kiev was blocking Russian gas transits to Europe or stealing gas, following a failure by Russia to make a test delivery through Ukraine.

He said Ukraine remained open for talks on gas supplies from Russia and had no outstanding debts to any Russian company, saying the final payment for 2008 had been made in late December with an advance payment for January supplies.

According to Gazprom, however, Ukraine still owes $614 million after paying off $1.5 billion.

President Dmitry Medvedev told Yushchenko on Monday that Russia was ready to resume talks immediately with Naftogaz on a 2009 gas contract, adding that the gas price would be set at market prices.

Gazprom earlier said that since Ukraine had refused an earlier preferential price of $250 per 1,000 cubic meters and would now have to pay "the average European market price of $450-470."

However, Yushchenko's energy security envoy Bohdan Sokolovsky said on Monday that if that was the case Ukraine would have to raise significantly its gas transit fees - from the current $1.7 per 100 kilometers to "the average European rate" of $4.7.

Yushchenko said on Tuesday that "in theory" the transit fee could be as high as $10.

He added that Russia had launched a targeted campaign against Ukraine in a bid to seize control of its gas transit network.