Ukraine Says May Halt Transfer of Gazprom`s Gas to European Customers :: Charter'97 :: News

On Monday, July 4, the Ukrainian national gas company Naftogaz Ukraine sent an official warning telegram to Russia`s natural gas monopoly Gazprom. Naftogaz threatened the Russian monopoly by stating it may halt deliveries of Russian gas to Gazprom`s European customers.

According to the News-Ukraine agency which quoted the Ukrainian service of Deutsche Welle, such a warning was prompted by an earlier announcement by the Russian gas monopoly made last week. Gazprom has made a unilateral decision to count 7.8 billion cubic meters of gas that is currently being stored in Ukrainian underground storage facilities as a payment for transit of the Russian gas through Ukraine.

The Russian gas has been stored in the Ukrainian underground facilities since the fall of 2004, and the Ukrainian authorities put the fuel under tight control. Over the winter period of 2004-2005 Gazprom sent 40 requests asking Naftogaz to release the gas from the underground storage facilities for subsequent export to Europe, but none of the requests was heeded. Having given up on the idea of freeing the gas from Ukrainian custody, the Russian gas monopoly announced that it will consider the gas as being payment for the Ukrainian transit of Russian gas. However, Gazprom`s decision made the Ukrainian authorities and Naftogaz unhappy and led to threats from Kiev.

If the two sides don`t reach an amicable agreement by fall, when the heating season starts, Europe may find itself lacking sufficient volumes of Russian gas.

The situation in which Ukraine considers itself to be in a position to blackmail Russia into satisfying its energy needs once again shows the need for alternative routes for transporting Russian gas to Europe. In the light of recent events the construction of the North European Pipeline that has been advocated by Gazprom, no longer seems like a waste of money, but more like a reasonable investment, free from the political risks that are associated with transit through Ukraine and Belarus.