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| Gazprom Cuts Russia’s Natural Gas Supply to Ukraine | Gazprom Cuts Russia’s Natural Gas Supply to Ukraine |
| (2 months later) | |
| MOSCOW — Further aggravating already tense relations between Russia and Ukraine, the Russian energy giant Gazprom cut off natural gas supplies to its neighbor on Monday, warning that the reduction could diminish the amount of gas flowing to Europe. | |
| The cutoff came after Ukraine missed a Russian-imposed deadline Monday to pay a nearly $2 billion installment for past gas deliveries, with senior officials on both sides exchanging heated remarks blaming the other. | The cutoff came after Ukraine missed a Russian-imposed deadline Monday to pay a nearly $2 billion installment for past gas deliveries, with senior officials on both sides exchanging heated remarks blaming the other. |
| It also coincided with a statement by the Ukrainian president, Petro O. Poroshenko, saying he would present a detailed cease-fire plan this week to end the fighting in eastern Ukraine. But it remained unclear how such a pact would be negotiated, in that Kiev has repeatedly said it would not talk with any separatists who had taken part in the uprising against the central government. For their part, the separatist leaders say Kiev has long ignored their concerns. | It also coincided with a statement by the Ukrainian president, Petro O. Poroshenko, saying he would present a detailed cease-fire plan this week to end the fighting in eastern Ukraine. But it remained unclear how such a pact would be negotiated, in that Kiev has repeatedly said it would not talk with any separatists who had taken part in the uprising against the central government. For their part, the separatist leaders say Kiev has long ignored their concerns. |
| The gas flowing into Ukraine as of Monday was meant only to transit the country to Europe. “Gazprom supplies to Ukraine only the amount that has been paid for, and the amount that has been paid for is zero,” Gazprom’s spokesman, Sergei Kupriyanov, told reporters. | The gas flowing into Ukraine as of Monday was meant only to transit the country to Europe. “Gazprom supplies to Ukraine only the amount that has been paid for, and the amount that has been paid for is zero,” Gazprom’s spokesman, Sergei Kupriyanov, told reporters. |
| The Ukrainian leadership accused Russia of fomenting a gas war on top of the violence for which it blames Moscow, while the Russian prime minister, Dmitri A. Medvedev, dismissed the entire Ukrainian leadership as “inadequate” in remarks on his Facebook page. | The Ukrainian leadership accused Russia of fomenting a gas war on top of the violence for which it blames Moscow, while the Russian prime minister, Dmitri A. Medvedev, dismissed the entire Ukrainian leadership as “inadequate” in remarks on his Facebook page. |
| On the surface, the dispute was about a large unpaid bill, nearly $4.5 billion in total, that Gazprom said Ukraine owed. The company, 50.01 percent owned by the Russian state, demanded that Kiev both settle its debt and pay in advance for future delivery before supplies resume. | On the surface, the dispute was about a large unpaid bill, nearly $4.5 billion in total, that Gazprom said Ukraine owed. The company, 50.01 percent owned by the Russian state, demanded that Kiev both settle its debt and pay in advance for future delivery before supplies resume. |
| But Ukraine is disputing the size of the existing tab, and there is no agreement over future pricing nor whether an entirely new contract is warranted. Russia wants Ukraine to pay $385 per thousand cubic meters, like the rest of Europe, while Kiev is insisting on the favorable price of $268 per thousand cubic meters that it used to get as a former Soviet republic. | But Ukraine is disputing the size of the existing tab, and there is no agreement over future pricing nor whether an entirely new contract is warranted. Russia wants Ukraine to pay $385 per thousand cubic meters, like the rest of Europe, while Kiev is insisting on the favorable price of $268 per thousand cubic meters that it used to get as a former Soviet republic. |
| But the gas showdown is rooted in two larger disputes. | But the gas showdown is rooted in two larger disputes. |
| First and foremost, the violence in eastern Ukraine between separatists devoted to Russia and the Ukrainian military is escalating, with 49 soldiers killed on Saturday when the separatists shot down a transport plane and demonstrators in Kiev marauded around the Russian Embassy in response. | First and foremost, the violence in eastern Ukraine between separatists devoted to Russia and the Ukrainian military is escalating, with 49 soldiers killed on Saturday when the separatists shot down a transport plane and demonstrators in Kiev marauded around the Russian Embassy in response. |
| In a statement, the Ukrainian prime minister, Arseniy P. Yatsenyuk, said that Russia’s move was part of a larger pattern of Kremlin aggression. | In a statement, the Ukrainian prime minister, Arseniy P. Yatsenyuk, said that Russia’s move was part of a larger pattern of Kremlin aggression. |
| “This is not about gas,” Mr. Yatsenyuk said. “This is a general plan for the destruction of Ukraine.” He said the decision was the latest in a series of steps that “began with the annexation of Crimea, the Donbass terrorists, supplying Russian weapons and sending Russian bandits to the territory of Ukraine.” | “This is not about gas,” Mr. Yatsenyuk said. “This is a general plan for the destruction of Ukraine.” He said the decision was the latest in a series of steps that “began with the annexation of Crimea, the Donbass terrorists, supplying Russian weapons and sending Russian bandits to the territory of Ukraine.” |
| Second, Gazprom has provoked economic ire in Europe over its plans to build an alternative gas route under the Black Sea for the company’s exclusive use, contradicting Europe’s open access laws. That has put the future of what is known as the South Stream pipeline in doubt. | Second, Gazprom has provoked economic ire in Europe over its plans to build an alternative gas route under the Black Sea for the company’s exclusive use, contradicting Europe’s open access laws. That has put the future of what is known as the South Stream pipeline in doubt. |
| Günther Oettinger, the European energy commissioner who has brokered the gas negotiations, said in Vienna that he would try to convene more talks this month. But he warned European Union members to maintain significant gas storage. | Günther Oettinger, the European energy commissioner who has brokered the gas negotiations, said in Vienna that he would try to convene more talks this month. But he warned European Union members to maintain significant gas storage. |
| Gazprom, which has sought for the past decade to convince the Europeans that it is a reliable supplier and not an arm of Russian foreign policy, painted the dispute as strictly commercial. | Gazprom, which has sought for the past decade to convince the Europeans that it is a reliable supplier and not an arm of Russian foreign policy, painted the dispute as strictly commercial. |
| “They must pay their debts,” Alexei Miller, the chief executive of Gazprom, told a news conference repeatedly, turning red in the face as he castigated Ukrainian efforts to link the dispute to the broader conflict. | “They must pay their debts,” Alexei Miller, the chief executive of Gazprom, told a news conference repeatedly, turning red in the face as he castigated Ukrainian efforts to link the dispute to the broader conflict. |
| At his side, Russia’s energy minister, Alexander Novak, criticized those calling the gas shutdown an “escalation” of the overall tensions. “We are talking about fully legitimate demands from the Russian side and Gazprom,” he said, stressing that the two sides had sat down seven times this spring trying to forge a compromise. | At his side, Russia’s energy minister, Alexander Novak, criticized those calling the gas shutdown an “escalation” of the overall tensions. “We are talking about fully legitimate demands from the Russian side and Gazprom,” he said, stressing that the two sides had sat down seven times this spring trying to forge a compromise. |
| Russia has cut off gas supplies to Ukraine twice before, in 2006 and 2009, both times during the winter months. Analysts noted that if you had to pick a month for a dispute over gas deliveries, June would be it. Demand is low, and given the mild winter in Europe, most countries have significant storage capacity. | Russia has cut off gas supplies to Ukraine twice before, in 2006 and 2009, both times during the winter months. Analysts noted that if you had to pick a month for a dispute over gas deliveries, June would be it. Demand is low, and given the mild winter in Europe, most countries have significant storage capacity. |
| Mr. Miller said Ukraine probably had enough gas stored to see it through the early fall — remarks echoed by Ukrainian officials. More important, Ukraine is contractually obligated to continue shipping the gas that transits its territory via Europe; Russia said it was only reducing that portion of the gas that Ukraine uses. | Mr. Miller said Ukraine probably had enough gas stored to see it through the early fall — remarks echoed by Ukrainian officials. More important, Ukraine is contractually obligated to continue shipping the gas that transits its territory via Europe; Russia said it was only reducing that portion of the gas that Ukraine uses. |
| About a fifth of the European Union’s supply of natural gas flows through Ukraine. Ukraine itself imported from Russia 63 percent of the natural gas it consumed in 2012, producing the remaining 37 percent domestically, according to the United States Energy Information Agency. | About a fifth of the European Union’s supply of natural gas flows through Ukraine. Ukraine itself imported from Russia 63 percent of the natural gas it consumed in 2012, producing the remaining 37 percent domestically, according to the United States Energy Information Agency. |
| Crunch time will come at the end of July, when both Ukraine and the rest of Europe will start topping off storage tanks in anticipation of winter. | Crunch time will come at the end of July, when both Ukraine and the rest of Europe will start topping off storage tanks in anticipation of winter. |
| Should Ukraine start siphoning off European supplies, Mr. Miller said Russia could increase the flow through the North Stream pipeline that runs under the Baltic Sea to Germany. But at least one-third of the supplies will still have to flow through Ukraine, said Laszlo Varro, who leads the gas, coal and power markets division of the Paris-based International Energy Agency. “Ukraine currently is essential to get Russian gas exports to Europe,” he said. | Should Ukraine start siphoning off European supplies, Mr. Miller said Russia could increase the flow through the North Stream pipeline that runs under the Baltic Sea to Germany. But at least one-third of the supplies will still have to flow through Ukraine, said Laszlo Varro, who leads the gas, coal and power markets division of the Paris-based International Energy Agency. “Ukraine currently is essential to get Russian gas exports to Europe,” he said. |
| Both Ukraine and Russia have an interest in keeping supplies flowing. Ukraine is trying to become a European economic ally, due to sign an association agreement on June 27, while Russia does not need another source of tension after annexing Crimea, provoking Western sanctions. | Both Ukraine and Russia have an interest in keeping supplies flowing. Ukraine is trying to become a European economic ally, due to sign an association agreement on June 27, while Russia does not need another source of tension after annexing Crimea, provoking Western sanctions. |
| “Both will want to avoid any disruption of gas flows to Europe,” said Chris Weafer, a senior partner at Macro-Advisory, a consulting company for foreign firms doing business in the former Soviet Union. | “Both will want to avoid any disruption of gas flows to Europe,” said Chris Weafer, a senior partner at Macro-Advisory, a consulting company for foreign firms doing business in the former Soviet Union. |