Europe may lose a quarter of its gas supply

Looks like this is going to be the first major news of the new year.


Medvedev, Putin discuss Ukraine's rejection of new gas price

MOSCOW, December 31 (RIA Novosti) - Russia' s president and prime minister on Wednesday evening discussed the situation regarding last-ditch gas talks between Gazprom and Ukraine as Kiev rejected a new offer of $250 per cu m in 2009.

Vladimir Putin noted during the discussion that "the consequences could be dire for Ukraine if it annuls its gas transit contract with Gazprom." He also informed Dmitry Medvedev that "the present contract is valid until December 31, 2010, and cannot be changed."

And it looks like there is a major disagreement between Ukraine's politicians on the issue. The more popular Timoshenko is trying to reach an agreement with Russia, while Yuschenko is firmly against any negotiation. Timoshenko and Yuschenko has been locked in a high-profile struggle for power in recent months.

Earlier in the evening Ukraine's Prime Minister Yulia Tymoshenko was reported to be on her way to Moscow for last-ditch negotiations on a new contract; however, her trip was canceled. Sources in Kiev said the visit would have undermined the Ukrainian president's position.

Ukraine's President Viktor Yushchenko has recalled the country's negotiation team, led by Naftogaz head Oleh Dubyna, back to Kiev, a Naftogaz source said on Wednesday.

Originally posted by maloy
And yes - Russian news confirm that the talks between Gazprom and Ukraine failed. Gazprom spokesman said that it is now decided that gas to Ukraine is to be cut off on Thursday. If European clients see their share of supplies drop, they have no one to blame but Ukraine.

Although I agree with you that they should pay their bill, I fully disagree with your argument that Ukraine is to blame if Europeans will see a decrease of supplies. European countries have a contract with Russia's Gazprom, not with Ukraine. Russia decided to transport through Ukraine, not the EU.

If Russia fails to supply, Russia is to blame and should be held accountable.

reply to post by MikeboydUS

How will it be good in the long term? Russia would be economically devastated. They would be in as much debt as the West. Neither side would benefit short or long term.

how so?
Russia has one of the largest forex reserves in the world , while the West is debt ridden and USA is tethering at the brink of collapse

Europe would not want the ruble and no one would want the Yuan either. China's economy would be just as devastated by a western economic collapse.

beggars cannot be choosers , as West will be bankrupt and Arabs/China/Russia will have reserves , they can dictate thier terms for a new 'Marshall ' plan in the West to rebuild their economy .... and thus , enableing eother respective currency to

China and Russia both would be too busy with internal security during such an economic collapse to dictate anything to anyone.

internal security problems in Russia are insitigated by western powers with collusion of Pakistan -saudi arabia along with help of CIA ... but Russia has controlled and neutralised the chechen terrorists ...

China does not want a western economic collapse. Its export economy needs people from the west to buy their products. Russia needs the world's energy markets to stay high in order to prosper. To do that Western economies need to have high demand for energy and plenty of money to purchase Chinese products

Chinese exports are only 8-10% of its GDP ....

Russia needs the world's energy markets to stay high in order to prosper.

don't worry , the OPEC want russia to jump into thier bandwagon and include gas in their cartel, once done, there will be monopoly of OPEC in energy market , thereby they can dictate the price they like ...

Another thing is the resulting effects of cutting off energy and devastating nations economically. Its a good way to foment desperation and extremism. Instead of really hurting the west it might lead to fascist demagogues and totalitarianism. Russia might find itself facing off with a fascist Trans Atlantic Union, a literal Western Imperium that Hitler could only dream of.

Russia can use 'divide and Conquer' in this case
1. it can bribe western politicans to ensure that policies enable russian influence
2. make financial instruments , like those which IMF makes on behalf on america , to destroy others.... (again enabling Russia more influence)
3. use intelligence services to stir up civil wars (like how Western powers do)

Russia might find itself facing off with a fascist Trans Atlantic Union, a literal Western Imperium that Hitler could only dream of.

Rusia alrady is facing a powerful imperium of fascist USa and its NATZI(NATO) allies , wihich are economically collapsing


[edit on 31-12-2008 by sadchild01]

Originally posted by Mdv2
I fully disagree with your argument that Ukraine is to blame if Europeans will see a decrease of supplies. European countries have a contract with Russia's Gazprom, not with Ukraine. Russia decided to transport through Ukraine, not the EU.

I understand what you mean, and you may be correct. However the blame rests in the details of the contract. Technically Russia would be transfering all European countries' (except for Ukraine) gas to them in full. The problem occurs during transport, where Ukraine siphons off (read steals) others' supplies. The question is who officially owns the portion of the pipeline running through Ukraine where the gas is siphoned off. If it is Gazprom - then it is responsible for loss of supplies. If it is the Ukrainian company, then it is responsible under the contract.

Russian sources indicate that while Gazprom will officially "stop" supplying gas to Ukraine, the current net supplies will not be decreased as Gazprom knows that Ukraine will take a portion anyway. So there might not actually be a cut in supplies. Instead Gazprom will track how much Ukraine uses, and then bill them for it along with a contract violation fines.

Russia is highly concerned about relations with its European customers, so it will likely be pressured to continue supplies in full. In the end however Ukraine will have to pay for everything they stole one way or another.

Originally posted by Mdv2
If Russia fails to supply, Russia is to blame and should be held accountable.

Who is going to hold it accountable and how? It is not like Europeans have any alternative sources of energy for the winter, and there is little they can do to Russia just like there is little Russia can do to Ukraine. Currently it is Ukraine that is accountable for nonpayment of debts. How do you propose Russia deal with Ukraine's accountability?

[edit on 31-12-2008 by maloy]

Originally posted by Mdv2
What a silly fear mongering again. May I give you a tip? Don't use the Iranian (state) press anymore as source. Ukraine officials have today arranged that Ukraine will pay 1 billion USD of its bill to Russia.

Anyhow, living in a country with the 2nd largest gas reserves in Europe, and the 17th largest in the world, I care little about all of this. Additionally, a new pipeline which is being built through the Baltic sea will avoid these Eastern European countries.

With all respect, what sources should I use then? Practically all sources are tainted in some way with various political slants and agendas, and I'm happy to read them all (which I do - in-fact I had never heard of presstv until joining ATS. I'm sure there are many more I need to be made aware of). I thought the point of ATS was to make aware, then digest and discuss with others - being able to bring in other views and resources to then 'hopefully' get a more 'broad' and 'accurate' viewpoint? Or did I get that wrong?

I see there have already been some intelligent responses quoting other news sources from people that have actually taken the time to go off and do their own research due to the OP. Again, each one of these needs looking at with 'caution' but in theory mix them all together and we hopefully have some truth....that's the gist anyway.

Originally posted by maloy

Originally posted by Mdv2
I fully disagree with your argument that Ukraine is to blame if Europeans will see a decrease of supplies. European countries have a contract with Russia's Gazprom, not with Ukraine. Russia decided to transport through Ukraine, not the EU.

I understand what you mean, and you may be correct. However the blame rests in the details of the contract. Technically Russia would be transfering all European countries' (except for Ukraine) gas to them in full. The problem occurs during transport, where Ukraine siphons off (read steals) others' supplies. The question is who officially owns the portion of the pipeline running through Ukraine where the gas is siphoned off. If it is Gazprom - then it is responsible for loss of supplies. If it is the Ukrainian company, then it is responsible under the contract.

Russian sources indicate that while Gazprom will officially "stop" supplying gas to Ukraine, the current net supplies will not be decreased as Gazprom knows that Ukraine will take a portion anyway. So there might not actually be a cut in supplies. Instead Gazprom will track how much Ukraine uses, and then bill them for it along with a contract violation fines.

Russia is highly concerned about relations with its European customers, so it will likely be pressured to continue supplies in full. In the end however Ukraine will have to pay for everything they stole one way or another.

Thanks for the explanation. Seems feasible, but since we don't know the contents of the contract, it seems hard to judge who is responsible then.

Originally posted by Mdv2
If Russia fails to supply, Russia is to blame and should be held accountable.

Who is going to hold it accountable and how? It is not like Europeans have any alternative sources of energy for the winter, and there is little they can do to Russia just like there is little Russia can do to Ukraine. Currently it is Ukraine that is accountable for nonpayment of debts. How do you propose Russia deal with Ukraine's accountability?

1- And Russia lacks the infrastructure to replace Europe with other potential customers willing to buy such huge volumes. With the current economic situation, Russia doesn't want to lose money unnecessarily.
2- Russia and the EU should hurry with the construction of Nord Stream and not deal with Ukraine. Personally, I'd love to see improved relations between Russia and Europe. I'm afraid that's not gonna happen with US puppet states such as Poland and Czech Republic.

Originally posted by Mdv2
Russia and the EU should hurry with the construction of Nord Stream and not deal with Ukraine. Personally, I'd love to see improved relations between Russia and Europe. I'm afraid that's not gonna happen with US puppet states such as Poland and Czech Republic.

Exactly. The Nord Stream project was pretty much a response to the previous gas dispute between Russia and Ukraine. However the pipeline is still years from completion and it will no doubt run into delays, especially considering the current economic situation.


There may be a sooner solution - one that will take place in Ukraine. President Yuschenko is one of the main problems of this dispute, and his administration refuses to make an agreement with Gazprom and pay the debt. However he is on the way out, and has support of less than 7% of the population. His likely replacement is Timoshenko, who is more willing to negotiate with Russia and start paying the debt. In recent months Timoshenko and other Parliamentaries have been trying to push impeachment of Yuschenko. Maybe the current crisis will speed up this process, and as soon as Yuschenko is booted out Ukraine can come to terms with Russia.

MOSCOW — A year ago, Gazprom, the Russian natural gas monopoly, aspired to be the largest corporation in the world.

Today, Gazprom is deep in debt and negotiating a government bailout. Its market cap, the total value of all the company’s shares, has fallen 76 percent since the beginning of the year.Instead of becoming the world’s largest company, it has tumbled to 35th place. And while bailouts are increasingly common,none of Gazprom's big private sector competitors in the West is looking for one.

That Russia’s largest state-run energy company needs a bailout so soon after oil hit record highs last summer is a telling postscript to a turbulent period. Once the emblem of the pride and the menace of a resurgent Russia, Gazprom has become a symbol of this oil state’s rapid economic decline.

During the boom times, Gazprom and the other Russian state energy company, Rosneft, became vehicles for carrying out creeping renationalization.

As oil prices rose, so did their stocks. But rather than investing sufficiently in drilling and exploration, Russia’s president at the time, Vladimir V. Putin, used them to pursue his agenda of regaining public control over the oil fields, and much of private industry beyond.

As a result, by the time the downturn came, they entered the credit crisis deeply in debt and with a backlog of capital investment needs. (Under Mr. Putin, now the prime minister, Gazprom and Rosneft are so tightly controlled by the Kremlin that the companies are not run by mere government appointees, but directly by government ministers who sit on their boards.)

The Russian economy is in great trouble at the moment. The Russian stock exchange has lost approximately 70% of its original value since the war with Georgia of last August. The Ruble has hit an all-time low value against the Euro. According to Dutch nationals living in Russia since 1989, Russians are very afraid of another economic collapse similar to the collapse of the Soviet Union. For that reason, many people are currently spending their savings on luxury products such as tvs, fridges, etc.

The reason being the financial crisis originating from the US as well as the low oil price. Russia is mainly dependent on income from oil and gas exports and a significant amount of its large foreign reserves has already been used on bailouts. Often they have threatened to cut off the gas supply to Europe but never will do that for a long time since they lack the infrastructure to export such volumes anywhere else.




I for one am happy that Gazprom's position is currently being destabilized since they are becoming way too dominant.

Good to their word

Russia has stopped all gas supplies to Ukraine after the collapse of talks to end a row over unpaid bills and prices.
Russia's gas giant Gazprom said it turned off the taps at 0700 GMT, when its contract to supply Ukraine ended.
Ukraine insists it has paid off its debts to Gazprom, but Russia contests this. The two countries have also failed to agree on a price for 2009.

Good news from your link:

"Usually we supply 390 million cubic metres per day, of which 300 million is transit gas for Europe. Today supplies are running at 300 million cubic metres. We continue supplying Europe in full," Reuters quoted him as saying.

Ukraine's state energy firm Naftogaz confirmed that supplies had dropped off steadily, and said it would start pumping gas from its reserves.

Ukraine says it has built up enough reserves to see it through the next few months.

Yes, it should mean Europe as a whole will not directly be affected.

Of course, this could be a way of Russia making sure the Ukraine reserves are depleted to make them more dependable on its supplier?

Either way, gas flows and talks will be held but tensions may be strained.

Gazprom cuts off Ukraine's gas supply
edition.cnn.com...

looks like they didnt reach an agreement

reply to post by AlwaysQuestion


Weird, on the BBC I heard that news, but they said that Europe would not be affected.

Originally posted by Tallsorts

Originally posted by MetatronCubensis
I'm thinking that Russia is either pissed about them wanting to put up the missile shield or they're just extorting more money.. or both.

There has been pressure on retail gas suppliers to lower prices here in Britain, and no doubt nobody but the end consumer wants lower prices.

It wouldn't surprise me if behind closed doors the British Illuminati placemen phoned Vladimir Putin and got him to squeeze us hard. After all, they're all crooks.

Never mind that it's estimated that a further 20,000 people are going to die from hypothermia in Britain this winter due to fuel price inflation. It's just another Illuminati tactic to reduce the population a bit, and put many of us ander pressure.

Nice, ain't it?

I agree, and it's nice to see that someone on this thread is looking outside the economic box and into what is really going on behind the scenes. This is going to play out again and again in the coming months and years... all you have to do is watch. We could get back to eden if we all changed our thinking, but um, I don't think our humanity has it in us.

Europe not being effected is dependent on whether the Ukraine siphons off the European supply line(s) to supplement their needs. So who actually thinks the Ukrainians are going to do without natgas in the dead of winter?

Gazprom-Ukraine Gas Conflict Could Leave Europe in the Cold

However, 80% of Europe’s gas supply is transited through Ukraine and Gazprom has warned that the country may resort to siphoning off gas en route to customers in other parts of the continent, as it did during a similar dispute in 2006.

Ukraine President Seeks U.S., EU Support in Russian Gas Dispute

By Daryna Krasnolutska

Jan. 2 (Bloomberg) -- Ukrainian President Viktor Yushchenko sought support from U.S. President George W. Bush, the European Union and leaders of seven other countries after Russia cut off gas supplies.

Yushchenko wrote to the leaders of the U.S., Austria, Germany, Italy, France, the Czech Republic, Slovakia and Hungary, as well as to European Commission President Jose Barroso, explaining the natural gas dispute, according to a statement on the president’s Web site.

Source

They can seek as long as they want, I think the EU should not support them at all. Instead, they should pay their bill and stop whining.

you guys forgot that ukraine is getting gas for the lowest price in the world and they still didn't pay Gazprom even a single penny. Ukrainian president said on 29th of december that they paid it and guess what - he lied to the whole world. Today he said that they will pay it till the january 11th .

Last time when it happened EU had to pay their bill. Ukraine cut gas delivery to the Balkan today, and yeah it's illegal. They've been steeling gas from EU for too long and they don't want to pay even part of the bill when they have the lowest price on gas in the world.

So, yeah blame the Russians when they want their money back. They have billions of dollars of minus because of the Ukraine (they actually had one of the most succesfull years in 2008 but it was because of the oil prices and they will have a lot of trouble in 2009).

Ukraine is quite a conartist when the matter of concern is money. Prior to 2005 when they were buying gas from Russia for $50 per 1000 cubic meters, the rest of the Europe was paying around $250. So what did Ukraine do? It resold the gas Russia sold to it at $50 to Romania and other countries for over $200. So Ukraine was making a very sizeable profit on Russian gas. Today they also get their gas at far lower prices than other Europeans. I wouldn't be surprised if the same reselling takes place today.

You can be sure that someone in Ukraine is lining their pockets from this dispute, and manages to lay all blame on Russia. Looks like Ukraine is trying to wage its own PR war.


And Yuschenko says that Ukraine has already transfered a partial payment of $1.5 billion for Russian gas. However there is something shady about this as well. The transfer was made to RusUkr Energy Company which is a small shady intermediary somewhere in Western Europe. Russia cannot verify where the money is or when Gazprom will actually get it.

KIEV, Ukraine (AP) — Ukraine's gas company Naftogaz said Tuesday that Russia's Gazprom slashed natural gas shipments to Europe by about two-thirds, while Balkan nations reported a complete shut off of Russian gas, in a sharp escalation of a struggle over energy that threatens Europe as winter sets in.

Bulgaria's energy ministry said Russian gas supplies to Bulgaria, Turkey, Greece and Macedonia were completely cut off Tuesday morning. Turkey's Energy Minister Hilmi Guler confirmed the cutoff of gas shipped through the Balkans.

Romania's gas transport company Transgaz said Gazprom ceased pumping gas into the pipeline in eastern Romania at 3 a.m. (GMT 0100) Tuesday morning.

Bulgarian pipeline operator Bulgargaz CEO Dimitar Gogov said the reason for the suspension was not clear, but that his country's gas reserves were sufficient to cover needs "for a few days."

Gazprom officials could not immediately be reached for comment. Late Monday, it said it would cut the amount of gas it ships to Europe through Ukraine by 65.3 million cubic meters, or about 20 percent.

In Ukraine, Naftogaz spokesman Valentyn Zemlyansky said Tuesday that the shipments to European consumers had dropped to just 81 million cubic meters of gas, down from about 300 million in recent days.

"That is all they are sending, in several hours Europe will feel it," Zemlyansky told The Associated Press. He said he could not confirm that gas shipments had been cut off to the Balkans.

Gazprom had said it would cut gas shipments by the amount it accuses Ukraine of diverting from its transit pipeline network. Russia supplies Europe with about a quarter of its gas, 80 percent of which is shipped through Ukraine.

Kiev denies allegations it is stealing gas, saying Russia is to blame for the disruption because it refuses to supply the gas needed to run its pipelines, including the compressor stations that pump gas west.

Each side says the other is responsible for supplying the gas to run the pipeline network, but there is no way to sort out the conflicting claims. Details of the transit contract are secret.

The rapidly expanding crisis, now approaching its sixth day, could eventually result in disruption of supplies for consumers in Europe, where gas is used for heating and electricity generation.

Some European countries had already reported experiencing supply problems after Russia cut off supplies to its neighbor on Jan. 1 over pricing disagreements and outstanding debt.

Officials in Hungary and Bulgaria have said supplies from pipelines through Ukraine remained down.

Russia's latest reductions appear aimed at putting pressure on Ukraine, which is refusing to pay $600 million Gazprom claims it is owed.

Russia is also demanding an increase in the price Ukraine pays for its gas. Now, Ukraine pays Gazprom $179.50 per 1,000 cubic meters of gas, less than half of the average price European countries are expected to pay this year.

Ukraine, one of the largest consumers of gas in the world, says it enough gas reserves to last for weeks.

During a similar dispute between Ukraine and Russia in 2006, which lasted just three days, several West European countries saw their gas supplies drop by 30 percent or more.

This time Gazprom's customers were better prepared, having built up substantial reserves.

While some Western analysts say Russia is using the current crisis to weaken Ukraine's government, Gazprom insists the dispute is purely a commercial matter.

Both nations have been hit hard by the global economic slowdown, neither seems to be in a position to afford a lengthy halt to the gas trade. Both say they are anxious to prove they are a reliable energy partner for the EU.

These Ukrainians are crazy. It's over -30C (or -22F) in Romania and could soon be cut off gas. Ukraine should pay their bill and stop whining.

Source

[edit on 6-1-2009 by Mdv2]

news.bbc.co.uk...

Grand Theft Methane

Ukraine just happens to be run by bandits. if they manage to cut off the EU long enough for shortages, it'll be interesting how the globalists are going to explain why Ukraine should be coddled and fast-tracked into NATO under the given circumstances.

as usual, the West is anything but picky when it comes to allies, especially when it comes to encircling Russia. the 'Orange Revolution' is taking its toll, still. jst like 2 years ago, see www.abovetopsecret.com...

btw, why on earth are transit contracts a secret?? shades of James Bond or what?


[edit on 2009.1.6 by Long Lance]