Europe
12:35 pm
Mon June 16, 2014

Citing Unpaid Debts, Russia Cuts Off Gas Supplies To Ukraine

Originally published on Mon June 16, 2014 4:20 pm

Russia says it has cut natural gas supplies to Ukraine after Kiev missed a deadline to pay part of its huge outstanding energy debt. The Russians say that in the future the state-run company Gazprom will only supply gas to Ukraine in return for pre-payment.

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Transcript

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Russia has cut off natural gas supplies to Ukraine. The two sides failed to resolve a dispute over Kiev's debt to its main energy supplier. The move means that Ukraine's nearly bankrupt government will have to pay in advance for future gas deliveries from Russia. If the dispute escalates, it could threaten gas supplies for other European countries. NPR's Corey Flintoff reports from Kiev.

COREY FLINTOFF, BYLINE: Russia's giant state-run gas company, Gazprom, announced the decision through its spokesperson, Sergei Kupriyanov.

SERGEI KUPRIYANOV: (Through translator) As of 10 o'clock this morning, Ukraine will only receive gas if it pays in advance. So far, we haven't received any payments, either on old debts or current ones. Gas meant for our European customers is still being supplied.

FLINTOFF: The decision comes after weeks of negotiations, in which Ukraine charged that Russia was gouging, demanding a higher price from Ukraine than it charges any other customers. Russia has been frustrated for years over Ukraine's failure to pay its bills. Ukrainian officials charged that Russia is using gas as a weapon to weaken Ukraine's new government and keep the country in Russia's economic and political sphere. This is Ukrainian analyst Volodymyr Omelchenko.

VOLODYMYR OMELCHENKO: (Through translator) It was expected that Russia would cut off the gas, because Russia considers this as part of a war against Ukraine.

FLINTOFF: Omelchenko is director of Energy Programs at the Razumkov Center, a think tank in Kiev. He says, Ukraine could retaliate by cutting off gas supplies through its pipelines to Europe, arguing that Ukraine has no obligation to transport gas for what he calls an aggressor nation. Europe receives about a third of its gas supplies from Russia, and about half that gas passes through pipelines that cross Ukraine, so a cut-off could eventually cause big disruptions. Omelchenko also says, Russia stole gas from Ukraine when it annexed the Crimean Peninsula.

OMELCHENKO: (Through translator) Ukraine and the West made a big investment so Crimea could produce. Russia has stolen Crimea, and Ukraine shouldn't pay until we get Crimea back.

FLINTOFF: He adds that Crimea is believed to have substantial gas reserves under the waters off its Black Sea coast. Dmytro Marunych is a Ukrainian energy expert and co-chairman of the Energy Strategies Fund in Kiev. He says the effect of Russia's gas cut-off probably won't be felt for another few months, because both Ukraine and Europe use much less gas in the summer.

DMYTRO MARUNYCH: (Through translator) But in the winter, we won't have enough gas in our storage tanks, because we need to fill our storage during the summer.

FLINTOFF: But Marunych says he doesn't think the crisis will get that far, because the two countries will now be forced to seek at least a temporary solution. Both sides have now taken the battle to the European courts. And Marunych says, there's not enough trust between them to negotiate a permanent settlement until the courts rule. But he also says, it's not realistic to think that Ukraine can make itself independent of Russian gas anytime soon, as some Ukrainian and Western politicians have suggested. Very often, he says, it takes a crisis to focus people's minds on negotiations. Corey Flintoff, NPR News, Kiev. Transcript provided by NPR, Copyright NPR.