By Roman Roman Olearchyk in Kiev & Jack Farchy in Moscow
Ukraine and Gazprom were locked in a tense stand-off over a $2.2bn gas bill which falls due Monday morning, intensifying fears that the Russian energy giant would cut off supplies.
As the deadline for payment loomed, the two sides remained far apart over outstanding debts and a new pricing regime, with no fresh negotiations over the weekend.
“There has been no progress,” said Sergei Kupriyanov, Gazprom spokesman in Kiev. “They are not paying anything, zero.”
The Ukraine government says it is willing to pay the $2.2bn bill, but reacted angrily to a move by Gazprom last week to raise the price it charges Ukraine from $268 per 1,000 cubic metres of gas to $485 and to claw back previous discounts.
“We cannot deliver gas for free, so they need to pay off the debt,” said Alexei Miller, Gazprom chief executive. “They also need to pay for 100 per cent of current supplies,” he said, adding that the situation “cannot continue indefinitely”.
Arseniy Yatseniuk, Ukraine’s prime minister, on Saturday accused Russia of following up on its annexation of Crimea with “a plan to pressure and grab Ukraine through gas and economic aggression”.
“We realise that the next step of Russia will be to limit supply of natural gas,” he said, recalling “the picture from 2006”, when Russia cut supplies.
Russia in 2009 halted gas transit through Ukraine amid a price dispute that caused serious disruptions in eastern European gas markets. During the first price dispute in 2006, Ukraine allegedly siphoned EU bound gas for domestic needs after Russia sharply reduced transit flow. Russia supplies about 30 per cent of Europe’s natural gas, with almost half of it piped through Ukraine.
“We are shifting into higher gear towards another gas war,” said Valentyn Zemlyansky, a Ukrainian energy analyst.
However, a person close to Gazprom played down the risk of any interruption to supplies this week. The price of natural gas in Europe is at its lowest level since 2010 as warm weather and high storage levels curb demand for the fuel.
Mr Yatseniuk urged the EU to press Slovakia’s gas transit pipeline operator into allowing so-called reverse gas transit flow, enabling Ukraine to import gas from the European market.
Russia annulled a 2010 agreement through which Kiev got a gas price cut in return for prolonging its right to use a Crimean port as base for its Black Sea naval fleet.
Crowds of pro-Russian separatists on Sunday seized government buildings in Donetsk and Lugansk, in eastern Ukraine. (FT)
