Tue, Jan 03, 2006 - Page 1 News List

Russia's Gazprom accuses Ukraine of stealing Europe's supply of natural gas

DPA , MOSCOW AND KIEV

Russian state gas firm Gazprom yesterday stood by its severance of natural gas supplies to Ukraine implemented on Sunday and accused its neighbor of stealing millions of dollars in exports intended for European customers.

Russia finally turned off the taps after a prolonged pricing dispute, with Ukraine illegally diverting 100 million cubic meters of gas for its own use, the company charged.

"The cost of Russian gas stolen by Ukraine over 24 hours was more than US$25 million," Gazprom deputy chief executive officer Alexander Medvedev said in Moscow.

Ukrainian Minister of Fuel and Energy Ivan Plachkov immediately rejected the theft charge and said Ukraine could meet its needs with gas from its other key supplier, Turkmenistan.

Ukrainian President Viktor Yushchenko also flatly contradicted Moscow's claim that Turkmen gas was no longer reaching his country via Russian pipelines.

Meanwhile, Ukrainian Prime Minister Yury Ekhanurov announced an energy economy program which he said would guarantee continued regular natural gas supplies in the country.

"Our priorities are [natural gas for] small users, central heating stations, and state-run institutions such as schools and hospitals," he said at the opening of a televised meeting of government officials to discuss the Russian blockade, and means of combating it.

The switch-off will affect Ukraine's heavy industry, he conceded. The country's metal and chemical-manufacturing firms could suffer shortages and should look to energy economy and alternate power sources, he said.

State-run power producers will also, to the extent that is possible, use oil and coal as a substitute for gas, Ekhanurov said.

The government will firstly coordinate energy conservation efforts through the formation of task forces for controlling and, if necessary, deciding which organizations receive gas in case of a shortage.

Civil defense authorities in Kiev said the amount of gas flowing through a mainline at the border with Russia had fallen from 2 million cubic meters an hour to 450,000m3.

Gas for export via Ukraine to other European countries was being pumped as normal, according to Gazprom.

The company cut off Ukraine after Kiev refused to accept an almost five-fold price increase.

Officials in Poland said there had been a slight drop in pressure in some eastern sections of its national gas pipeline grid but that stocks sufficed.

Gazprom demands that Ukraine now pay the market price of US$230 per 1,000m3 of gas instead of the previous subsidized rate of US$50.

Ukraine's Foreign Ministry in Kiev accused Moscow of using economic pressure and blackmail to destabilize its economy.

also see story:

Russia, Ukraine argue over gas

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