Gas Flowing Again
January 20, 2009
Slovak Economy Minister Lubomir Jahnatek told a news conference that gas had arrived at a Slovak gas border station at Velke Kapusany.
Slovakia has been one of the European countries hardest hit from the fallout of a row between Russia and Ukraine over natural gas deliveries that impacted supplies to Europe.
"Gas is not only flowing in the direction of Europe but it is flowing to Europe," Alexander Medvedev, deputy chief executive of Russian energy giant Gazprom, told a conference call to reporters.
About 20 European countries have had their gas supplies curtailed and some countries were forced to ration supplies to customers or close down factories.
On Tuesday, Ukraine confirmed it was receiving gas from Russia and said it would deliver it to Europe as soon as possible, although Kyiv said it be up to 36 hours before supplies reach other parts of Europe.
About a quarter of Europe's natural gas is provided by Russia and 80 percent of that passes through Ukraine.
Austria's oil and gas group OMW said Russian gas could reach its eastern hub of Baumgarten on Wednesday, Jan. 21. Turkey's energy ministry said Russian gas supplies should be back to normal on Thursday.
Heated row
The gas row between Russia and Ukraine reflects the political tension between the two countries as Moscow does not look favorably on Kyiv's desire to join the NATO military alliance.
Russia cut its gas supplies to Ukraine on Jan. 1 after the two countries could not agree on a 2009 contract. Six days later, supplies to Europe via Ukraine also stopped after Russia accused Ukraine of siphoning off gas intended for transit.
Gazprom has said under a new agreement, Ukraine will pay $360 (278 euros) per 1,000 cubic meters of gas in the first quarter of this year. It is a sharp increase from the $179.50 that Kyiv was paying for the same gas last year.
The new price, although expected to fall later in the year, could be a huge burden on Ukraine's already fragile economy.
Gazprom has also warned that if Ukraine falls behind in its payments, the energy giant will raise the price and require Kyiv pay for all its gas in advance.
Doubts about Russia
Although gas supplies are resuming, there will likely still be lingering doubts in the EU about Russia's reliability as an energy supplier.
European Commission President Jose Manuel Barroso said on Tuesday he was disappointed with Russia and Ukraine over their handling of the gas dispute but said Brussels would not turn its back on them.
"I was very disappointed in these days about the way the leadership in these two countries negotiated," Barroso told reporters in Brussels. But he added: "Russia and Ukraine are important partners."
"It is in our interest in keeping and developing our relations."
Slovakian Prime Minister Robert Fico said the gas cut has cost his country's economy about 100 million euros a day.
Bulgaria, which is almost entirely dependent on Russian energy, found itself without enough gas to heat households properly during the winter. Hundreds of firms in the country had to cut back on production.
"The impacts on the Bulgarian economy are catastrophic," Economy and Energy Minister Petar Dimitrov told Reuters in an interview. "The impact very much resembles that of a terrorist attack."
He added that the EU should allow Bulgaria to reopen two Soviet-era nuclear reactors to compensate for damages caused by the gas cutoff. Slovakia had also considered restarting one of its old reactors when the gas stopped flowing.