The Financial Times (Great Britain): "Moscow-Kiev gas tensions"
By Ed Crooks in London and Roman Olearchyk in Kiev
The bitter gas supply dispute between Moscow and Kiev escalated yesterday when Russia's Gazprom revealed the two sides were far from reaching an agreement and warned Ukraine would not be allowed to "steal" gas.
The state-controlled gas company's deputy chief executive, Alexander Medvedev, told the Financial Times that talks with Ukraine about unpaid debts and future prices were still "far away from a settlement" but he hoped a deal could be reached before the end of the year.
However, he quoted Vladimir Putin, Russia's prime minister, as having "made a very clear statement that if Ukraine tries to steal the gas, we will not tolerate this situation".
Kiev and Moscow have quarrelled over how much Ukraine should pay for gas since the early 1990s in a dispute that led to severe supply disruptions and soaring prices in some European Union countries in the winter of 2005-06. Russian imports supply about 25 per cent of the EU market and about 80 per cent of that gas flows through Ukraine.
In a similar dispute a year ago Gazprom reduced supplies to Ukraine without a significant effect on the EU.
However, with the global financial crisis putting pressure on both sides, tensions are rising ahead of a new supply agreement due to take effect on January 1. Gazprom believes it is owed about $2.4bn for unpaid bills up to the end of November, and has been paid only a "marginal" amount following an agreement last month for Ukraine to pay off some of its debt.
Gazprom executives will meet European Commission officials in Brussels today in an attempt to explain its determination to make Ukraine pay up.
The Russian company thinks Brussels might be able to exert some influence to help bring about a solution, or can at least be persuaded that if supplies are disrupted, the fault will not entirely lie with Gazprom.
Ukraine's leaders have in recent days pledged that their country would do everything in its power to avoid a repeat of disruptions in Russian exports to the EU.
However, officials at Naftogaz, Ukraine's national gas company, struggled yesterday to predict how debts owed to Gazprom would be settled or when a price agreement for next year would be signed.
Gazprom says it has been making every effort to avoid cutting off Ukraine's gas, including allowing some of the payments to be deferred.
Gazprom is also seeking to finalise an October deal between Mr Putin and Yulia Tymoshenko, Ukraine's prime minister, in which the price paid by Ukraine will rise to EU levels by 2011. The details of the transition are still not agreed.
Ukraine is paying $179.50 per thousand cubic metres of gas, compared with an expected EU price of about $400 in the first half of next year.
Mr Putin said last week: "How can we keep the same prices if our Ukrainian partners are still getting gas twice as cheaply as Europe?
"Try to come to any store in Germany and say that you want to get a Mercedes for free or at half price. Who will sell it at half price?"
Naftogaz said yesterday: "The global financial crisis, namely the sliding Ukrainian currency, has complicated our efforts to settle this debt. We are currently in talks with Ukrainian and foreign banks to refinance this debt."
