Russia-Ukraine Gas Dispute Escalates, EU Players Attempt to Broker Peace

Strategic Insights -

A potential deal to restore natural gas supplies from Russia to Europe via Ukraine has collapsed due to Moscow's rejection of amendments made by Kiev, sparking a new wave of diplomatic activity. Russian President Dmitry Medvedev appealed to EU leaders to influence Ukraine to withdraw the added terms, while Putin proposed emergency talks in Brussels. Ukraine had signed an agreement allowing gas flow monitoring, but appended a declaration stating it had not siphoned off gas and had no outstanding debts to Gazprom.

Key Takeaways:

  • Russian President Dmitry Medvedev described Ukraine's amendments as a "mockery of common sense" and a "violation of earlier achieved agreements."
  • The Ukrainian declaration attached to the monitoring agreement states that Ukraine has not siphoned off any transit gas and has no outstanding debts to Gazprom.
  • Gazprom described Russia's demand for "technical" gas to maintain pipeline pressure as "an attempt to legalize the theft of gas."
  • The European Commission's Chief Jose Manuel Barroso and Ukrainian Prime Minister Yulia Tymoshenko agreed to address Russia's concerns and separate the Ukrainian declaration from the main protocol.
  • Putin proposed sending officials to Brussels for emergency talks, while the European Commission said that Ukrainian PM Tymoshenko agreed to separate the two documents and work on new terms of reference.

Statistics:

  • 20% of EU gas supplies come through Ukraine (European Commission source)
  • €500 million (approximately) in daily gas transit revenues for Ukraine (Ukrainian government estimate)
  • 1/5 of EU's gas supplies come through Ukraine (European Commission source)
  • 100% transit guarantee from Ukraine (Valentin Zemlyansky, Naftogaz spokesman)
  • 56% of Bulgaria's schools shut due to lack of heat (Krasimira Dimitrova, 56-year-old Bulgarian resident estimation)

Sources:

  • Reuters News Agency article
  • European Union statement
  • Ukrainian government declaration
  • Gazprom statement
  • Valentin Zemlyansky, Naftogaz spokesman