Russia Says It Will Halt Delivery of Natural Gas to Ukraine
January 1st, 2009Via: Washington Post:
Russia said Wednesday night that it planned to suspend delivery of natural gas to Ukraine on Thursday morning after negotiations to resolve a politically tinged dispute over prices collapsed without an agreement.
A cutoff of fuel shipments to Ukraine could have a ripple effect across Europe, because Russia supplies a quarter of the gas that the continent uses, and most of it is delivered through Ukrainian pipelines.
Russia briefly followed through on a similar threat in 2006. Fuel shortages resulted as far away as Italy, and concerns grew about Europe’s dependence on energy controlled by the Kremlin.
The current dispute centers on Russia’s desire to charge higher prices for gas next year and collect more than $2 billion in debts run up by Ukraine for gas this winter. But as in previous years, the commercial issues have been complicated by Moscow’s tense relations with Ukraine’s fractured, pro-Western government.
Alexei Miller, chief executive of Gazprom, Russia’s state-controlled gas monopoly, announced the collapse of talks and said the company planned to halt supplies for Ukraine at 10 a.m.
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“All responsibility for the situation rests on the Ukrainian side,” he said.
Gazprom warned two weeks ago that it would suspend gas supplies if Ukraine failed to pay off its debts and sign a contract for next year’s deliveries by midnight Wednesday. As the deadline approached, Miller said Ukraine had met neither requirement.
Research Credit: Lagavulin
