22nd Oct 2016

Barroso warns Russia against cutting Ukraine gas

  • EU commission president says Russia must maintain gas flows to Ukraine (Photo: Naftogaz of Ukraine)

The EU on Wednesday (21 May) warned Russia against interrupting gas supplies to Ukraine amid threats by state-owned Gazprom to cut flows.

“As long as the trilateral talks are on-going, gas flows should not be interrupted. I count on the Russian Federation to maintain this commitment,” said European Commission chief Jose Manuel Barroso in a letter to Russia’s President Vladimir Putin.

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Barroso’ letter comes after Putin threatened to halt supplies unless Ukraine pays back €2.55 billion for gas already delivered.

Russia supplies around 50 percent of Ukraine's gas requirements. It also supplies 30 percent of Europe's gas, mostly via Ukraine.

Gazprom has also threatened to cut supplies in June unless Ukraine starts to pay in advance for future shipments.

“Given the circumstances, the Russian company has issued an advance invoice for gas deliveries to Ukraine, which is completely in accordance with the contract, and after June 1 gas deliveries will be limited to the amount prepaid by the Ukrainian company,” Putin warned, the BBC reports.

Barroso noted that gas talks kicked off in early May between EU energy commissioner Gunther Oettinger and his Russian and Ukrainian counterparts.

“The discussions held have in particular covered the issue of the price for gas supplies to Ukraine and have established the willingness of the Government of Ukraine to pay the agreed upon arrears,” he said.

He noted Gazprom must also ensure deliveries of the required volumes as agreed in the supply contracts with European companies.

Russia had late last year offered a 33 percent discount on gas, along with a $15 billion loan, to Ukraine’s Yanukovich-led government.

But the discounted $270 (€198) per 1,000 cubic metres price has since doubled with Gazprom now demanding $485 (€350) per 1,000 cubic metres.

Oettinger, for his part, earlier this week announced a compromise to resolve the gas dispute with Russia could be reached by the end of the month.

The commissioner is set to meet Russian energy minister Alexander Novak and Ukrainian energy minister Yuriy Prodan for a second round of talks in Berlin on 26 May.

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