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| Russia’s Gazprom and Ukraine are in a gas dispute as winter approaches | Russia’s Gazprom and Ukraine are in a gas dispute as winter approaches |
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| KIEV, Ukraine — The frigid water that comes out of the “hot” faucet of Alexander Korniienko’s shower in Kiev is a warning for his nation: After months without natural gas shipments from Russia, Ukraine may be facing a chilly winter. | KIEV, Ukraine — The frigid water that comes out of the “hot” faucet of Alexander Korniienko’s shower in Kiev is a warning for his nation: After months without natural gas shipments from Russia, Ukraine may be facing a chilly winter. |
| Ukrainians are layering their sweaters in preparation for yet another tough confrontation with the Kremlin, this time over energy. It is a replay of previous wintertime gas cutoffs by Russia that led to accusations that the Kremlin was using its bountiful energy supplies as a political weapon. This year, any wintertime shortfall could be far more serious for Ukrainians already contending with the dire effects of a separatist war. | Ukrainians are layering their sweaters in preparation for yet another tough confrontation with the Kremlin, this time over energy. It is a replay of previous wintertime gas cutoffs by Russia that led to accusations that the Kremlin was using its bountiful energy supplies as a political weapon. This year, any wintertime shortfall could be far more serious for Ukrainians already contending with the dire effects of a separatist war. |
| Korniienko has been on the vanguard of those facing the latest gas cutoff, since Kiev eliminated city-provided hot water in July as a conservation measure. Now he bathes by heating water in pots on his stove and sloshing it over his head. | Korniienko has been on the vanguard of those facing the latest gas cutoff, since Kiev eliminated city-provided hot water in July as a conservation measure. Now he bathes by heating water in pots on his stove and sloshing it over his head. |
| “We have the ice-bucket challenge every morning,” said Korniienko, 23, a computer programmer. “You take one shower and you go out and you get sick,” he added, suppressing a sneeze. | |
| After months of grinding negotiations, officials from Russia, Ukraine and the European Union on Friday announced a last-ditch proposal to help Ukraine get through the winter, but the sides still appeared to be squabbling over the price Russia will charge Ukraine. Analysts said the plans may still be derailed. | After months of grinding negotiations, officials from Russia, Ukraine and the European Union on Friday announced a last-ditch proposal to help Ukraine get through the winter, but the sides still appeared to be squabbling over the price Russia will charge Ukraine. Analysts said the plans may still be derailed. |
| The E.U. is eager to foster a deal, because continued disruptions in Russian gas shipments could extend the winter discomfort to Eastern European nations that are largely dependent on Russia for their supplies of natural gas. Most of Europe is as far north as Canada — Minneapolis is at roughly the same latitude as southern France, and Kiev is level with Calgary — so winters can be bitter. Natural gas is the most important fuel for heating their homes and providing hot water. | |
| Energy experts and diplomats warn that Ukraine has not done enough to prepare for a season with severely limited gas supplies even as other European nations have been trying to stockpile the resource as a safety measure. | Energy experts and diplomats warn that Ukraine has not done enough to prepare for a season with severely limited gas supplies even as other European nations have been trying to stockpile the resource as a safety measure. |
| “It is not going to be easy,” Ukrainian Prime Minister Arseniy Yatsenyuk told a Ukrainian television station this month. “Freeze? No, we will not freeze. But it is not going to be warm, I warn you.” | “It is not going to be easy,” Ukrainian Prime Minister Arseniy Yatsenyuk told a Ukrainian television station this month. “Freeze? No, we will not freeze. But it is not going to be warm, I warn you.” |
| Russia seized Ukraine’s Crimean Peninsula in March and then backed a separatist insurgency in Ukraine’s east that has cost at least 3,500 lives, according to U.N. estimates. The conflict has severely damaged infrastructure there. | Russia seized Ukraine’s Crimean Peninsula in March and then backed a separatist insurgency in Ukraine’s east that has cost at least 3,500 lives, according to U.N. estimates. The conflict has severely damaged infrastructure there. |
| As the ground fighting worsened over the summer, so did the confrontation over energy. | As the ground fighting worsened over the summer, so did the confrontation over energy. |
| “People understand what the situation is,” Ukrainian Energy and Coal Industry Minister Yuriy Prodan said in an interview ahead of the Friday negotiations. “They know that Russia switched off gas. They know that Russia is leading a war against us, not just war but also an economic war. And naturally they expect a complicated fall and winter period,” | |
| Under the E.U. plan proposed Friday, Ukraine would repay $2 billion in debt to the state-backed Russian gas company Gazprom by the end of October and an additional $1.1 billion by the end of the year. In return, Gazprom would supply at least 5 billion cubic meters of gas to Ukraine over the next six months at $385 per 1,000 cubic meters, roughly on par with average European prices and the price Ukraine was paying until December 2013. Ukraine needs 5 billion to 12 billion cubic meters of gas beyond what it has stored to make it through the winter, officials have said. | |
| The E.U. price proposal is in line with what Russia has been pushing for months, reflecting a mounting European effort to have Ukraine settle the dispute and avoid a broader disruption of gas supplies. About 15 percent of the gas that Europe uses transits through Ukrainian pipelines. Ukraine depends on Russia for 60 percent of its gas. | The E.U. price proposal is in line with what Russia has been pushing for months, reflecting a mounting European effort to have Ukraine settle the dispute and avoid a broader disruption of gas supplies. About 15 percent of the gas that Europe uses transits through Ukrainian pipelines. Ukraine depends on Russia for 60 percent of its gas. |
| Prodan told journalists Friday after the negotiations that Ukraine still had not consented to the price — the key sticking point in the negotiations — and had not settled on the lump sum to be paid to Gazprom. The negotiators plan to keep talking in coming days. Gazprom says that Ukraine owes it $5.3 billion for gas delivered last year and in the first months of 2014, a figure that Ukraine disputes. | Prodan told journalists Friday after the negotiations that Ukraine still had not consented to the price — the key sticking point in the negotiations — and had not settled on the lump sum to be paid to Gazprom. The negotiators plan to keep talking in coming days. Gazprom says that Ukraine owes it $5.3 billion for gas delivered last year and in the first months of 2014, a figure that Ukraine disputes. |
| Even if the sides do finalize a deal next week, it doesn’t eliminate the risk of a cutoff later in the winter, said Edward Chow, an energy expert at the Washington-based Center for Strategic and International Studies. Russia stopped supplying gas to Ukraine in the winters of 2006 and 2009, also during times of political confrontation. | Even if the sides do finalize a deal next week, it doesn’t eliminate the risk of a cutoff later in the winter, said Edward Chow, an energy expert at the Washington-based Center for Strategic and International Studies. Russia stopped supplying gas to Ukraine in the winters of 2006 and 2009, also during times of political confrontation. |
| “There’s still a lot of short-term brinksmanship that people can play, depending on what else is going on in the political sphere,” Chow said. | “There’s still a lot of short-term brinksmanship that people can play, depending on what else is going on in the political sphere,” Chow said. |
| He said that the government that took over when President Viktor Yanukovych was ousted in February had done little to push energy-sector reforms that would reduce opportunities for corruption, a major problem that analysts say has contributed to Ukraine’s long-term dependence on Russian energy. Ukraine also heavily subsidizes household gas supplies, a politically popular policy but one that has created little incentive to increase energy efficiency, which is stuck at Soviet-era levels. | He said that the government that took over when President Viktor Yanukovych was ousted in February had done little to push energy-sector reforms that would reduce opportunities for corruption, a major problem that analysts say has contributed to Ukraine’s long-term dependence on Russian energy. Ukraine also heavily subsidizes household gas supplies, a politically popular policy but one that has created little incentive to increase energy efficiency, which is stuck at Soviet-era levels. |
| This year’s gas cutoff did not have a major effect on ordinary Ukrainians during the warm months. But as chillier weather has settled over the country in recent weeks, the problems are becoming more acute. In Kiev, as in many cities across the former Soviet bloc, water and air are heated at massive central stations and piped to apartment buildings. | This year’s gas cutoff did not have a major effect on ordinary Ukrainians during the warm months. But as chillier weather has settled over the country in recent weeks, the problems are becoming more acute. In Kiev, as in many cities across the former Soviet bloc, water and air are heated at massive central stations and piped to apartment buildings. |
| The uncertainty about gas supplies “means we’ll need more clothes” this winter, said Mykhailo Gonchar, an energy expert who is the head of the Strategy XXI Center for Global Studies, a Kiev-based research organization. Apartments might be heated to 60 degrees rather than 72 degrees this winter, he said. | The uncertainty about gas supplies “means we’ll need more clothes” this winter, said Mykhailo Gonchar, an energy expert who is the head of the Strategy XXI Center for Global Studies, a Kiev-based research organization. Apartments might be heated to 60 degrees rather than 72 degrees this winter, he said. |
| Since the June gas cutoff, Ukraine has been dependent on the goodwill of its neighbors to send some gas coursing backward through pipelines in a process called reverse flow. Those supplies are not enough to cover all of Ukraine’s needs, and Gazprom has said the practice is illegal. | Since the June gas cutoff, Ukraine has been dependent on the goodwill of its neighbors to send some gas coursing backward through pipelines in a process called reverse flow. Those supplies are not enough to cover all of Ukraine’s needs, and Gazprom has said the practice is illegal. |
| Countries that have agreed to help Ukraine have seen their own supplies from Russia come under pressure. Poland was forced to cut off its shipments to Ukraine for a week this month when Russian gas flows dipped. Hungary announced Friday that it was ending all gas flow to Ukraine, saying that it had to prioritize its own citizens’ needs in the event that the Ukraine-Russia conflict disrupted gas supplies later in the winter. | Countries that have agreed to help Ukraine have seen their own supplies from Russia come under pressure. Poland was forced to cut off its shipments to Ukraine for a week this month when Russian gas flows dipped. Hungary announced Friday that it was ending all gas flow to Ukraine, saying that it had to prioritize its own citizens’ needs in the event that the Ukraine-Russia conflict disrupted gas supplies later in the winter. |
| Korniienko, the computer programmer, said that he had traveled home to western Ukraine — a six-hour drive — to take a bath at his parents’ house. Other friends in Kiev who have purchased electric water heaters have offered to let him shower at their places occasionally. | Korniienko, the computer programmer, said that he had traveled home to western Ukraine — a six-hour drive — to take a bath at his parents’ house. Other friends in Kiev who have purchased electric water heaters have offered to let him shower at their places occasionally. |
| “It’s not comfortable, but there’s no choice,” he said. | “It’s not comfortable, but there’s no choice,” he said. |