Working Day

5 january, 2009 20:09

Prime Minister Vladimir Putin held a working meeting with Gazprom President Alexei Miller

Prime Minister Vladimir Putin held a working meeting with Gazprom President Alexei Miller
Mr. Putin and Mr. Miller discussed the situation of the gas delivery to Ukraine and the gas transit through the Ukrainian territory.

The following is the transcript of the beginning of the meeting

Vladimir Putin: It's the dead of winter. How are Russian consumers being supplied with gas?

Alexei Miller: Gas is supplied to Russian consumers under contracts, regularly and in the full amount. There have been no problems with meeting the needs of the Russian economy and the households.

Vladimir Putin: Does that apply to all the regions where Gazprom supplies its gas?

Alexei Miller: It applies to all the regions where Gazprom supplies gas, even the regions where the weather has been getting cold recently.

Vladimir Putin: What about gas supplies to nearby foreign countries?

Alexei Miller: Gas to nearby foreign countries is supplied in the full amount under contracts, with the exception of Ukraine.

Vladimir Putin: How are we working with the Georgian partners?

Alexei Miller: At present, we are working normally.

Vladimir Putin: In other words, you are supplying gas to Georgia?

Alexei Miller: Yes. We have just learned that Georgia is prepared to resume gas supplies to South Ossetia.

Vladimir Putin: I understand that in general, the entire volume contracted by Georgia is being delivered to the republic.

Alexei Miller: Yes.

Vladimir Putin: What is the situation with the Ukrainian consumers and partners? How is work going on that front?

Alexei Miller: Ukraine has not signed a contract for gas supply in 2009. Supply of gas to Ukraine has been suspended. Gazprom delivers all the gas to the border between Russia and Ukraine that has been contracted by buyers for transit via Ukraine.

Vladimir Putin: What about supplies to Western European consumers under long-term contracts? How is Ukraine meeting its obligations as a transit state?

Alexei Miller: Over the past several days, Ukraine has siphoned off Russian gas from the gas pipelines on its territory without authorization. The scale of what amounts to theft is growing by the day. We are receiving information from our foreign buyers and from independent observers to the effect that not all the gas destined for Europe is being delivered.

Vladimir Putin: Who are the "independent observers"?

Alexei Miller: Gazprom monitors the passage of gas through Ukrainian territory in adjacent states. We do the monitoring together with SGS, an independent international company.

Vladimir Putin: Are there foreign observers on Ukrainian territory?

Alexei Miller: An official request has been filed with NAK Naftogas Ukrainy to provide access to Ukrainian gas measuring stations for observers, including independent international observers, and we have received an official written refusal.

Vladimir Putin: In other words, our Ukrainian partners have refused access to international observers to their territory?

Alexei Miller: Yes, they have refused and have notified us about it officially.

Vladimir Putin: Has Ukraine signed the International Energy Charter?

Alexei Miller: Ukraine has not only signed, but has ratified the Energy Charter. We now see that the mechanism of the Energy Charter does not work, since Ukraine is not meeting its obligations under the Charter.

Vladimir Putin: Is the contract for the transit of our gas to European consumers working? Have you made the necessary verifications?

Alexei Miller: We have carried out the requisite verifications, and have a statement from an independent legal firm that has been published. According to an independent legal audit, the contract for the transit of Russian gas is in effect until the end of 2010.

Vladimir Putin: And Ukraine still refuses to fulfill that contract?

Alexei Miller: Ukraine refuses to fulfill that contract and is stealing Russian gas from its pipeline on a growing scale.

Vladimir Putin: How much gas has Ukraine stolen since the moment we suspended the supply of our gas to Ukraine?

Alexei Miller: Since January 1of this year, Ukraine has stolen 65.3 million cubic meters of our gas on its territory.

Vladimir Putin: How much does it owe us for last year?

Alexei Miller: Ukraine has failed to pay its debt for gas supplied in 2008, and that debt amounts to more than $600 million. If things continue like this and Ukraine continues to steal Russian gas, the debt will soon amount to billions of dollars.

Vladimir Putin: What do you suggest?

Alexei Miller: Gazprom has been officially notified by the Federal Customs Service that the currency proceeds in connection with undersupply of gas for export have not been returned. That is a serious breech of Russian laws. Gazprom has no grounds for supplying gas in amounts stolen by Ukraine to the border between Russia and Ukraine. Thus, it has been suggested to cut the amount of supplies to the border between Russia and Ukraine by exactly the amount Ukraine has stolen, 65.3 million cubic meters, and to subtract the amount of gas stolen in the future.

Vladimir Putin: Day by day?

Alexei Miller: Yes, day by day.

Vladimir Putin: But in that case, our Western European customers will not get the full amount they have contracted for.

Alexei Miller: Yes, in that case our Western European partners will not be receiving the amounts of gas stolen by Ukraine, but Gazprom will do all it can to compensate for that volume in other ways. We may increase supplies of Russian gas via Belarus and Poland and increase supplies of Russian gas via The Blue Stream to Turkey. We will do everything to increase the take-off of gas from underground storage facilities in Western Europe. Gazprom has pumped the necessary amounts of gas into the underground storage facilities in Europe in a timely manner. In addition, we will compensate our Western partners for undersupply - effectively, the theft of Russian gas on Ukrainian territory - by buying gas in the term market.

Vladimir Putin: In your opinion, who will eventually have to pay for the gas being illegally siphoned off the export pipeline?

Alexei Miller: NAK Naftogas Ukrainy.

Vladimir Putin: What about consumers inside Ukraine? They will also be undersupplied. We are talking about large amounts: as far as I remember, Ukraine consumes 110-125 million cubic meters a day. Ukrainian consumers will suffer. I feel sorry for the common people.

Alexei Miller: According to our reliable information, Ukrainian President Victor Yushchenko personally ordered a unilateral suspension of talks with Gazprom on gas supply to Ukraine this year. Apparently, he does not feel sorry for the common people.

Vladimir Putin: He is not sorry, but we are; everyone should feel sorry for them, because we are related to the people who live there.

Alexei Miller: We also know that Ukraine produces about 20 billion cubic meters of gas a year, and the amount of stored gas in Ukraine at present exceeds its annual output. Given the good will of the Ukrainian leadership, the people of Ukraine should not suffer.

Vladimir Putin: I agree. Start reductions as of today. And one more thing: please inform our European partners, European Commission and the European Parliament, promptly - next week - about the situation with our Ukrainian partners in the gas sphere and the measures being taken.

Alexei Miller: Yes, of course I will inform them.