Tuesday, January 6, 2009

Gazprom cuts the flow through Ukraine

This has been a developing story over the last few days, well covered in the mass media. The Russian natural gas monopoly Gazprom, which is functionally an arm of the Putin-Medvedev regime (or some say, Putin and Medvedev work for Gazprom), has been locked in a dispute with Ukraine over price increases and Ukraine has responded by planning an increase in transhipment fees for gas moving through to Europe.

The fight has gotten ugly enough that Gazprom simply ordered a suspension of deliveries to Ukraine.

But with Gazprom cutting the taps and the pipeline pressure down, Officials in Sofia say that Bulgaria is getting no gas and that Bulgaria, Greece and Turkey are getting no gas from the via-Ukraine pipeline. (Turkey has access to a second line under the Black Sea, however)

A panic has now swept through the EU offices in Brussels, and they are demanding (not asking nicely) for a summit meeting with Russia and Ukraine. Yes, the document even reads like an ultimatum to restore flow.

Good luck on that.

For anyone who didn't see this author's shot at Gazprom and European collaborators back last November, perhaps a more current observation would be of interest. National Public Radio of the U.S.A. is running a three part story plus an overview article on Gazprom and Russia's Foreign Policy that is pretty damning in its message.

American President R. Reagan once warned against European dependence on Russian energy sources.

He was right, then and now.


L.Douglas Garrett said...

Ukraine, it seems, saw this coming and planned accordingly.

Good for them. Would that the EU had shown such competence.

L.Douglas Garrett said...

Gazprom has now cut all flows via Ukrainian pipeline operator Naftogaz, losing 80% of its delivery capacity to European and Balkan customers.

Not the best move, considering that pipelines run as a continuous system, especially for large natural gas systems, so cutting off the delivery pipelines pretty quickly means overfull reservoirs. That means either: (a) flaring -- bye-bye profits; or (b) shutting down the production fields -- in the middle of Russian winter, when the whole system will turn semi-condensed and freeze the machinery.

Ukraine's position in the (now planned for Wednesday) negotiations looks stronger by the moment.