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OIL AND GAS
Ukraine needs to observe gas contracts, Gazprom says
by Daniel J. Graeber
Kiev, Ukraine (UPI) Sep 16, 2014


disclaimer: image is for illustration purposes only

Reliable natural gas deliveries to Europe depend largely on contractual issues in Ukraine, Russian energy company Gazprom said Tuesday.

Gazprom in June cut gas supplies to Ukraine because of ongoing disputes over pricing and debt. Ukraine pays some of the highest prices for natural gas in the region. Russia had offered a discounted price, though the Ukrainian government said it suspected the offer was politically motivated.

Russia meets about a quarter of Europe's gas needs, though most of that gas runs through the Soviet-era transit network in Ukraine. Similar rows in 2006 and 2009 left European consumers in the cold and Gazprom says the onus is now on Ukraine.

"The reliability of these supplies [to Europe this winter] can be ensured only on the condition that Naftogaz of Ukraine strictly observes its transit contract," Gazprom said in a statement.

The announcement comes as the Ukrainian government ratified an association deal with the European Union. A tilt toward the EU in November led to political upheaval in Kiev and the annexation by Russia of the Crimean Peninsula of Ukraine.

The EU and its Western allies have issued sanctions on the Russian energy sector in response to the conflict. Russian Deputy Foreign Minister Sergei Ryabkov told state news agency RIA Novosti sanctions were a violation of international law.

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