28th Oct 2016

Gas war escalates as Russia halves Slovakia supplies

Russia has cut gas deliveries to Slovakia by half in a bad sign for EU efforts to broker a deal on Ukraine.

Prime minister Robert Fico told press after a cabinet meeting in Bratislava on Wednesday (1 October) that the drop came without any warning.

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He said his national distributor, SPP, can still "fulfill its commitments" on “reverse flow” to Ukraine and supply customers in Slovakia and the Czech Republic by buying extra volumes on the spot market.

But he criticised Russia, saying: "Gas has become a tool in a political fight … This isn't about a lack of gas, it’s about playing with gas supplies as an instrument of political posturing”.

He said he does not expect a gas crisis this winter because it would cause too much “economic damage on both sides”.

But he called for EU help in dealing with Moscow.

“We want to co-ordinate this situation with the European Commission … Slovakia will need co-operation in the European sphere”.

Slovakia, Hungary, and Poland started selling Russian gas back to Ukraine after Russia cut off its neighbour in a price dispute in June. But Hungary also cut off Ukraine after the CEO of Russian gas firm Gazprom visited Budapest last week.

The Slovak crunch comes ahead of meetings between EU officials, Russia, and Ukraine on Thursday and Friday.

The EU commission has put forward a deal for Ukraine to pay Russia $3.1 billion of debt and to pre-pay for gas month by month at above market prices until April in return for 5 billion cubic metres (bcm).

If there is no agreement Ukraine won’t be able to supply EU transit customers as normal.

But Andriy Kobolyev, the CEO of Ukraine’s national distributor, Naftogaz, told German daily Handelsblatt on Wednesday that without reverse flow he will need another 5 bcm from Russia to keep EU supplies going.

He also criticised the EU for doing nothing to make Hungary keep its promise.

“Two EU companies, including a German one, have contracts with Hungary for gas delivery from there to Ukraine. But these are now simply stopped. Where is European solidarity?” he said.

German chancellor Angela Merkel and EU commission chief Jose Manuel Barroso have also urged Russia not to escalate the gas war.

Merkel called Vladimir Putin on Wednesday, while Barroso published a personal letter to the Russian leader.

For his part, former German chancellor Gerhard Schroeder, who now works for Gazprom, in a speech in Rostock on the Baltic Sea coast the same day said the EU should take back economic sanctions to improve the situation.

He said the Russia sanctions are “wrong … I want to say that loud and clear”.

But Germany’s ambassador to the US, Peter Wittig, speaking at a think tank in Washington on Monday, indicated that Schroeder is out of touch with feeling in Berlin.

Wittig said that Putin “broke trust” and “renounced … [the] partnership that we had” by putting troops in Ukraine.

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