Gazprom's second attempt to resume gas supplies to Europe via Ukraine has also failed. Ukraine's Naftogaz has again refused to allow the flow of Russian gas to Europe. The pretext is new: the need to fill the pipeline, but the underlying cause is the same: the pipeline is empty because Kiev has siphoned off gas. Meanwhile, the premiers of Russia, Bulgaria, Slovakia, and Moldova had an emotional meeting in Moscow yesterday trying to solve the gas problem. They failed, prompting President Dmitry Medvedev to invite all the countries that get Russian gas via Ukrainian territory to gather for a summit meeting in Moscow on Saturday. Yulia Tymoshenko and Victor Yushchenko were also invited. The current gas crisis can only be solved through a face-to-face meeting.
In spite of its Monday promise to the European Union and Russia to immediately resume transit, Ukraine put forward new demands. As follows from the Naftogaz letter, it now wants to get 140 million cubic metres from Gazprom to restore the amounts of gas stolen from transit gas pipelines. For good measure, it demands a schedule of deliveries for the entire first quarter. That boils down to signing a contract without stating the price. Kiev would not settle for anything less: either you restore all that has been stolen from the Ukrainian pipelines or there will be no transit.
Nonetheless, Naftogaz CEO Oleg Dubina orally mentioned a smaller figure and made the correction that gas had not been stolen but "taken" from the pipe.
"I have sent Gazprom a protocol. The protocol contains a request: please, lend us technical gas to enable our gas transportation system to resume operation," he explained. "We named the figure of 42 million cubic metres, which we took out when gas transit to Europe was suspended. However, we sent part of that gas to Moldova, which leaves only about 18 million cubic metres. Ukraine has never stolen and cannot steal gas because it is signed up in the balance and in the acceptance statement."
In addition, Ukraine wants Russia to supply 21 million cubic metres of technical gas everyday, also for free. The gas is needed for the turbines and under the current contract is to be provided by the transit country, yet Kiev claims that it does not have the necessary amount of gas, despite the fact that it has pumped 30 billion cubic metres into its underground storage facilities.
"There is no other way but to get technological gas from Russia," Ukrainian Fuel and Energy Minister Yuri Prodan complained yesterday.
In short, Kiev has a lot of reasons for not pumping gas to Europe. In the meantime, Moscow has been thinking up ever new schemes. Russian President Medvedev proposed that Ukraine supply gas to Slovakia from its own storage facilities if it found this to be convenient. In that case, Gazprom would be ready to make extra matching deliveries of gas.
As for Europe, it has again washed its hands of the entire affair; President of the European Commission Jose Manuel Barroso neatly avoided pointing the finger of blame. Meanwhile, the premiers of the freezing European countries were heading for Moscow and not Brussels to sort out the situation because they had despaired of getting support from the "head office".
Some papers are only fit to light stoves
Just after midday yesterday, the Prime Ministers of Slovakia, Bulgaria and Moldova, the countries hardest hit by the cut off in gas supplies, joined Prime Minister Vladimir Putin at his Novo-Ogaryovo residence. Putin had invited them the day before to explain the Russian position and thus convert them from disgruntled gas consumers into political allies, of whom we have lamentably few in Europe. It turned out to be a difficult conversation, however.
The sullen-looking prime ministers sat across the table from Putin, Vice Premier Igor Sechin, and Deputy Head of Gazprom Alexander Medvedev, each of whom had piles of papers in front of them undoubtedly meant to state Russia's case.
"We are sorry about what is happening and are doing all we can to resume transit," Putin said, speaking in an unusually slow and gloomy manner. We are disappointed that the signed protocol (on gas transit via Ukraine - Izvestia) is not being fulfilled by our Ukrainian colleagues. Although statements are made at the political level, including by the Ukrainian President, that Ukraine is not obstructing the transit of Russian gas, the reality is totally different."
However, the visiting prime ministers seemed to be reluctant to be drawn into the blame game. They don't care who is right or wrong; their main concern is getting the gas flowing.
"Since January 6, we have been in a very difficult situation; gas supplies have been reduced by three times," Prime Minister of Moldova Zinaida Grechany complained. "We have always considered Gazprom to be a reliable partner... people do not understand why they have to freeze if a contract is in place. In general, I think that the issue would be solved if the economic agents came to an agreement," she concluded angrily, speaking more like a woman than like a Prime Minister.
"The worst of it is that millions of people in Europe feel themselves to be hostages," Bulgarian Prime Minister Sergei Stanishev chipped in. "The biggest risk for Russia and Ukraine is the issue of trust."
Putin was visibly angry. The most impassioned plea came from Slovak Prime Minister Robert Fico, who had come to Moscow from Kiev where he was probably told the opposite of what Putin was telling him now. One could see from the Slovak's face that he was on the verge of a nervous breakdown.
"I would have actually preferred a bilateral meeting," he began, glaring at Putin. "The situation in Slovakia amounts to a crisis... I have heard the arguments that it is Ukraine's fault, but you know, we cannot be judges, we cannot interfere. However, I have warned Tymoshenko that Ukraine is losing trust because of the way it is behaving..."
Mr Fico also said that he had been shown some documents in Kiev allegedly supporting Ukraine's case. That was too much for Putin.
"I would like to know what documents," he snapped. "What documents can they produce other than those signed by the European observers and which say that we have started gas transportation... We have opened the tap and they haven't," Putin said, throwing a pile of documents on the table angrily. "Whoever submits whatever papers, I will throw them into the stove."
A meeting of consumers
After meeting the Russian Prime Minister, the group of gas consumers met the Russian President.
"Not the most joyous occasion for a meeting. The blockade of Russian gas supplies to Europe still continues," Dmitry Medvedev greeted his guests, not even attempting a smile.
The guests were stone-faced. The President was trying to impress upon them that Kiev's arguments that the transit route proposed by Gazprom was unacceptable did not hold water. "1420 millimetres is the main transit channel by which gas is traditionally supplied to Europe," Medvedev said. Thus, it was clear that Gazprom was not up to any tricks in order to harm Ukraine by making transit impossible.
"We cannot become hostages to the political situation in other states," the President said.
He suggested that all countries consuming Russian gas gather in Moscow on Saturday for an emergency summit to solve the gas problem. The Ukrainian leaders were also invited. It is high time to discuss everything in person. If our opponents refuse to take part, they are thereby admitting their reluctance to solve the issue by all available methods. If they show up, it means they are ready to be absolutely frank. It won't be possible for one party to say one thing and the other party another thing. It won't be possible to accuse Gazprom of being selfish and imposing unacceptable conditions for transit because Gazprom executives will be facing them and will be ready to respond to all the challenges in the presence of the Europeans.
Bypassing Ukraine
The Western countries find the conflict between Ukraine and Russia utterly puzzling. While prices for immediate supplies of natural gas to Europe soared to the highest point in the last three years, some European officials have privately expressed suspicions that Moscow and Kiev are in collusion. They feel that Ukraine and Russia want to artificially jack up gas prices, especially since both stand to benefit from it. Such allegations do not hold water, but they do indicate the long-time wish of the Europeans to minimize their dependence on all energy suppliers. So far the current situation has done Russia nothing but harm. According to Igor Sechin, Gazprom lost a staggering $1.2 billion due to the suspension of transit via Ukraine. On the other hand, any crisis always opens up new opportunities. For example, it will now be easier to convince the Europeans of the need to build the North European gas pipeline, also known as Nord Stream (which will stretch under the Baltic Sea from Russia to Germany) and the South Stream (under the Black Sea and further to Bulgaria, the Balkans, Austria and Italy). There is little doubt that the former will be launched in 2011 and the latter in 2013 in real.
The total capacity of the new gas pipelines would be 85 billion cubic metres a year, which equals almost 70% of the gas Europe currently gets via Ukraine.
* * *
Izvestia will help the Ukrainian Foreign Ministry to master its native language
The Ukrainian Foreign Ministry has denied yesterday's report in Izvestia that Kiev and Washington had agreed to restore and modernize the country's gas pipeline system together. Ukrainian Foreign Ministry spokesman Vasily Kirilich told the Ukrainian media that the Strategic Partnership Charter signed between Ukraine and the US in December says nothing about cooperation in revamping and modernizing the Ukrainian gas transportation system. There can be only two explanations for that: either Vasily Kirilich cannot read Ukrainian, or he has never seen the text of the Charter. To spare the Ukrainian Foreign Ministry similar embarrassment in the future, Izvestia is ready to inform it on the international documents signed in Kiev. It also undertakes to clarify confusing passages. For starters, here is an extract from clause 2, section three of the Charter, specifically for the benefit of Mr Kirilich: "The Parties plan to closely cooperate in restoring and modernizing the capacity of the Ukrainian gas transportation infrastructure."
We have translated the text into Russian just in case the Ukrainian Foreign Ministry press spokesman is unsure of his Ukrainian. If he has perfect command of Ukrainian, then he can read the full text of the document in Ukrainian on Izvestia's website, www.izvestia.ru.
Pavel Arabov; Yekaterina Grigoryeva; Alexander Latyshev; Yelena Shishkunova