Gas Crisis Resolved

• January 21st, 2009
• Posted by Daniel Challis

Russia has recommenced pumping gas to Ukraine and Europe after weeks of a drawn out stalemate between gas giants, the Gazprom and Naftogaz companies.

Slovakia recently confirmed gas was beginning to flow into the country; it was one of several EU member states most affected by the cut-off…

GAS FLOW RESUMES

A spokesman for Russia’s gas company Gazprom, Boris Sapozhnikov, told the BBC gas flow was restarted at around 10:30am Moscow time on Tuesday (20.01.09, 3:30am AEST).

Ukraine confirmed it was receiving gas, but officials say it could take up to 36 hours to pump gas across Ukraine and then on to customers further down the pipeline.

The Czech EU Presidency welcomed the resumption of gas supplies to citizens of the European Union and asked for Russia and Ukraine to stay true to their word:

“We expect Russia and Ukraine to honour their commitments so that full flow of natural gas is not disrupted again.”

Gas flows commenced after the two countries finally agreed on the new price Ukraine would pay for Russian gas.

However, President of the EU’s Energy Council Martin Riman said it was necessary to remain “cautiously optimistic” about the gas flow.

“For the EU, the decisive moment will be the moment when the restored supplies are observed on its borders,” he said.

NEW CONTRACT

The Russian and Ukrainian Prime Ministers watched on as Naftogaz and Gazprom signed a 10-year contract for the new price of gas on Monday (19.01.09).

Ukraine will now pay €278 (AU$544, dcerates.com, 21.01.09) per 1000 cubic metres of gas in the first quarter of this year; a substantial increase from the €139 euros (AU$272) Kiev was paying for Russian gas last year.

The new price is expected to drop later in the year, but nonetheless the higher bills will still be a burden on Ukraine’s already ailing economy.

The Ukrainian Prime Minister Yulia Tymoshenko said Kiev would end up paying around €193 per 1000 cubic metres of gas (AU$377), on average, over the course of 2009.

Gazprom has warned Ukraine that if it falls behind in payments the price will go up and it will demand payment in advance.

GAS COORDINATION GROUP

The European Commission came up with a coordinated plan on Monday (19.01.09) to support EU member states most affected by the gas crisis.

Bulgaria remains the worst affected country and measures have been proposed to import gas from Greece.

Other countries affected by the crisis are Austria, Hungary, Slovakia, Poland and Croatia.

The plan will help countries manage the situation for several weeks, to get them through the winter if the new Russia/Ukraine deal falters.

The President of the European Commission, Jose Manuel Barroso, said on Tuesday (20.01.09), the EU will inevitably have to reduce its dependency on Russian gas and look to more reliable sources for its supply.

GAS FLOW TO SLOVAKIA STAVES OFF  NUKE-TALK
Gas flow hit Slovakian borders yesterday after a long and painful wait for one of the worst hit countries by the crisis.

This month Bratislava declared a state of emergency after its supplies were cut, forcing it to consider restarting a Soviet-era nuclear reactor to maintain power supplies for major industries and electrical facilities.

Both the European Union and the neighbouring member state  Austria criticised the plan to put the reactor back into operation, calling it unsafe.

The European Commission warned legal action might be taken if it was restarted.

Greenpeace IN Europe last week also warned such a decision would put the whole continent at risk without providing any relief for gas shortages.

“[Nuclear power] cannot substitute gas for heating in the short term. There is absolutely no reason to re-start Bohunice, a dangerous nuclear power plant,” said “Dirty Energy” policy campaigner, Jan Haverkamp.

With the recommencing of gas flow to Europe, Slovakia may be abandoning the plan to reactivate the plant altogether.

The country’s Economy Minister Lubomir Jahnatek told Czech TV that Slovakia had managed to stabilise its grid.

“I hope to have a chance to say next week that (the reactor at) Jaslovske Bohunice is definitely closed,” Jahnatek said.

Reference:

Greenpeace European Unit, ‘Slovakia uses gas dispute to reopen dangerous nuclear plant’ (12.01.09), http://www.greenpeace.org/eu-unit/press-centre/press-releases2/slovakia-restarts-nuclear-station-12-01-09, (21.01.09).

BBC News, ‘Russia opens gas taps to Europe’ (20.01.09), http://news.bbc.co.uk/2/hi/europe/7839053.stm, (21.01.09).

Czech Presidency of the European Union, ‘Contract signed between Gazprom and Naftogaz’ (19.01.09), http://www.eu2009.cz/en/news-and-documents/news/contract-signed-between-gazprom-and-naftogaz–6662/, (21.01.09).

Deutsche Welle, ‘Russian Natural Gas Reaching Europe Again’ (20.01.09), http://www.dw-world.de/dw/article/0,,3961968,00.html, (21.01.09).

Czech Presidency of the European Union, ‘Czech Presidency welcomes resumption of Russian gas deliveries through Ukraine’ (20.01.09), http://www.eu2009.cz/en/news-and-documents/news/czech-presidency-welcomes-resumption-of-russian-gas-deliveries-through-ukraine–6811/, (21.01.09).

European Commission, Brussels, ‘Gas Coordination Group: Solidarity works and the EU’s gas market adapts to challenges of gas crisis’ (19.01.09), http://europa.eu/rapid/pressReleasesAction.do?reference=IP/09/75, (21.01.09).

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