No Resolution As Ukrainian Gas Supplies Dwindle

Gazprom, Russia’s state-run natural gas monopoly, is accusing Ukraine of stealing gas bound for Europe as it travels through its pipelines. “The Ukrainian side openly admits it is stealing gas and has no shame about it,” company spokesman Sergei Kupriyanov said Friday, while downplaying the amount as insignificant.

The accusation comes as negotiations on gas shipments and pricing continue to stall. Russia cut gas supplies to Ukraine on Thursday, and earlier accused the country of attempted blackmail over price negotiations.

The Ukrainian state gas company, Naftogaz, denied that it was siphoning Russian gas, and the Ukrainian government promised that gas flows to Europe would not be interrupted.

Around 25 percent of Europe’s gas supplies come from Russia, and 80 percent of that comes through Ukrainian pipelines. Responding to fears that European supplies could be cut, the Czech Republic, which currently holds that European Union Presidency, called for crisis talks.

“Energy relations between the EU and its neighbors should be based on reliability and predictability,” the Czech presidency said in a statement. “We feel that the situation has now escalated to a point that substantiates an extraordinary meeting.”

Gazprom also announced Friday that Naftogaz would pay 1.5 billion dollars in outstanding fees by January 11th, but underscored that it was still owed 614 million dollars in penalties. No agreement on 2009 supply had been signed, the company said.

Russia has been accused of using gas flows as a lever of political pressure against Western-leaning neighbors, and last cut supplies to Ukraine in 2006. The latest spat may damage Russian credibility as a stable supplier of natural gas.

Gazprom CEO Alexei Miller said Thursday that Ukraine should pay 418 dollars per thousand cubic meters (tcm) of natural gas, up from 179.50 in 2008, and up from Gazprom’s first proposal of $250 per tcm. Naftogaz has said it cannot pay more than $235 per tcm for the gas.

For the moment, Europe is safe from any short-term after-effects of the break in negotiations. With warm weather ahead, existing supplies are expected to last for at least one month.