Thursday, March 6, 2008

Gazprom & Ukraine Fighting Natural Gas with Europe in the Middle?

Western Europe is watching warily as Russia and Ukraine are locked in a natural gas dispute that has reduced the supply to Ukraine by at least half since the beginning of the week.

After Russia’s state­controlled natural gas monopoly announced the second supply cut in two days on March 4, Ukraine’s natural gas company said there are no immediate plans to divert Europe­bound gas to Ukrainian customers, but held out the possibility it could do so if reserves run low.

Much of the Russian gas consumed in Europe comes in pipelines crossing Ukraine.

The Russian monopoly, OAO Gazprom, is demanding Ukraine sign documents resolving a $600 million debt dispute and enabling further gas deliveries. On March 3, it cut shipments by 25 percent.

Gazprom spokesman Sergei Kupriyanov announced another 25 percent cut in the evening on March 4 and held out the possibility of more.

The European Union “looks to the parties to make every effort to find a rapid and durable solution to their disagreement.

In addition, we look to both parties to ensure that gas supplies to the EU remain unaffected,” EU Energy Commissioner Andris Piebalgs said in a statement.

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