Russia, Ukraine enter gas supply standoff

Source:Reuters Published: 2015-11-26 0:53:14

A clash over natural gas pricing between Russia and Ukraine escalated on Wednesday, with Russian exporter Gazprom announcing it will halt deliveries and Kiev saying it can find cheaper supplies from Europe.

Gazprom said that by 10 am on Wednesday, Ukraine had received all the gas it has paid for.

However, state gas transport monopoly Ukrtrasgaz said that Ukraine will continue importing gas Wednesday and expects to receive about 5 million cubic meters (mcm) of gas.

Though Ukraine is an important channel for Europe's ­imports of Russian gas, the European Commission (EC) said it is not worried about the situation for the moment.

"The European Commission has no particular concern about the gas flows from Russia to Ukraine and no further comment to make," said EC spokesperson Anna-Kaisa Itkonen.

Kiev has imported 400 mcm of Russian gas so far this month, Ukrtransgaz data showed.

Ukrainian Energy Minister Volodymyr Demchyshyn said this week that Kiev had enough gas in reserve to ensure that is not critical to buy gas from Russia at this stage.

Demchyshyn said gas consumption had been as much as 19 percent lower, year-on-year, this season and estimated that reserves will stand at around 16 billion cubic meters by early December, 2 billion higher than at the same point last year.

Andriy Kobolev, head of Ukrainian state energy firm Naftogaz, said this month that Ukraine will buy gas from Russia until the end of the year, but gave no details.

Ukrainian Prime ­Minister Arseny Yatseniuk said Wednesday that the Ukrainian government will prevent Naftogaz from buying any more gas from Russia to reduce its energy dependence on Moscow.

"The government has decided to order Naftogaz to stop buying Russian gas. It is not that they are not delivering us gas, it is that we are not buying any," Yatseniuk said. "We are doing this because the price offers from our European partners are significantly better than those from our northern neighbor."

Kiev will also ban Russian airlines from using Ukrainian airspace for any transit flights, Yatseniuk said. Kiev has already ended direct ­passenger flights between the two countries.­

Posted in: Europe

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