MOSCOW, January 12 (RIA Novosti)
Russia dictates capitulation terms to Ukraine / Russia admits eyeing Ukrainian pipelines / Gazprom may face multimillion claims from Europe for shortfalls in fuel deliveries / India signs $2.1 billion plane deal with Boeing
Vremya Novostei
Russia dictates capitulation terms to Ukraine
Moscow has prepared well for the perennial gas conflict with Ukraine this year, and is now using it to nudge Europe into controlling Ukraine's gas transportation system.
Kiev has backed itself into a corner, and now even the settlement of protocol differences and a special commission cannot ensure uninterrupted gas supplies to Europe. Last December, Ukraine claimed it could live without Russian gas supplies because it had enough gas in its gas storage tanks, but analysts say this would halt the operation of gas-fueled enterprises.
Ukrainian energy company Naftogaz has violated its gas transit obligations during cold spells before, including in January and February 2006, when European companies said they did not receive all the contracted gas despite Russia and Ukraine ending their first gas war and signing a package deal on January 4 that year.
Ukraine will have to honor the transit contract with Russia's energy giant Gazprom at $1.7 per 1,000 cubic meters per 100 km (62 miles) until 2011, or steal gas again when Russia resumes gas supplies to Europe via Ukraine.
According to unofficial information, the rash letter Naftogaz head Oleh Dubyna wrote on December 31, 2008, to warn Gazprom that Russian gas crossing the border would be confiscated as "smuggled goods" unless the Russian company signed a new contract, was for Moscow the straw that broke the camel's back.
Russia wants to get maximum economic and political dividends from the situation, although its decision to suspend gas transit across Ukraine has destroyed its image as a reliable supplier.
Negotiations on new gas supplies have been deadlocked, and the previous price of $250 per 1,000 cubic meters is now improbable. But transition to a market price of $450, which Gazprom CEO Alexei Miller said corresponded to the price of gas supplied to Eastern Europe minus the transit fee, would be a very heavy burden for the "young Ukrainian democracy" that expected the West to protect it.
Vedomosti
Russia admits eyeing Ukrainian pipelines
Russia is willing to participate in the privatization of the Ukrainian gas pipeline system if Ukraine risks it, Prime Minister Vladimir Putin told the German ARD TV channel, although he of all people should have known that the plan is unfeasible under Ukrainian law.
Kiev must have dreaded this for a long time. Gazprom is vying for control of the transit pipeline, Vedomosti was told by Ivan Diyak, Ukraine's presidential aide for gas issues. He said that could explain Moscow's tight position as well as Gazprom's decision to actually cut off the gas flow to the EU across Ukraine on January 7, as it had never done before.
The subject of Gazprom's possible participation in managing the gas transit pipeline was repeatedly brought up during previous gas conflicts between Moscow and Kiev, a former Gazprom manager said. A Russian government source declined to comment, while Gazprom denied any speculation on that account.
Ukraine and Russia will now have to agree the gas price for 2009, Gazprom's transit fees, Ukraine's debt for the Russian gas delivered in 2008 and for the gas Ukraine tapped between January 1 and 6 without authorization.
Putin suggested the EU should issue a loan to Ukraine to refinance the debt Ukraine won't recognize. Prime Minister Yulia Tymoshenko said her country would pay for the "technical" gas withdrawn in the first week of January, only later.
Privatization of Ukraine's whole gas transportation system is an unlikely scenario, said Alexander Gudyma, aide to the Ukrainian prime minister. Even if the government approves the plan, negotiations will take too much time, he added.
Ukraine will never agree to cede "the pipe" to Russia alone, said Alexander Ryazanov, a former Gazprom deputy CEO. "But they will probably allow Gazprom to help manage it, along with Europeans or Americans," he said.
This scheme isn't new. In 2002, Russia and Ukraine signed an agreement to establish a parity gas consortium to manage the Ukrainian pipeline; Germany joined the club in 2003. But the consortium only exists on paper, while privatizing the pipeline is banned under Ukrainian law.
Nezavisimaya Gazeta
Gazprom may face multimillion claims from Europe for shortfalls in fuel deliveries
The gas war with Ukraine is threatening Gazprom with multimillion claims from consumers in Europe, news agencies report. Over recent days the holding's European partners have placed increased requests for Russian gas with it. Their calculation is simple: should the contract fall short, Gazprom will have to pay a 5% penalty on the price of the undelivered gas.
Shortfalls in deliveries to Europe are now estimated at $500 million, and no end of the gas dispute is in sight. Experts say penalties and trials are unlikely to be avoided. "The only question is against whom they will be levied," said Sergei Pravosudov, the director of the National Energy Institute. "Gazprom is sure to challenge them and re-direct them to the Ukrainian side, with the result that the saga will last for at least 6 or 12 months."
Gazprom could sell the fuel to Europeans on the Russian-Ukrainian border, not directly to a consumer country as now. In that case, the holding could avoid problems with Ukraine and accusations from Europeans. Arbat Kapital analyst Vitaly Gromadin explains Gazprom's reluctance to sell gas directly on the border by fears that Gazprom would have to sell all its gas to Ukraine, rather than to European Union countries. Kiev in turn could resell it to Europe, earning a nice profit. "This option does not appeal to the Russian company whose strategy is to reach out for end-users in Europe," Gromadin said. "Understandably, Gazprom would like to use the same scheme with Ukraine as it does with Belarus, where 50% of the Beltransgaz pipeline company will be made available to it in exchange for reduced prices."
Kommersant
India signs $2.1 billion plane deal with Boeing
The Indian Defence Ministry has signed a $2.1 billion deal with US aerospace giant Boeing Co. to buy eight P-81 maritime surveillance aircraft for the Indian Navy. The new planes will replace eight Soviet-made Tu-142M maritime reconnaissance/anti-submarine warfare (ASW) turboprop aircraft.
Analysts said the agreement to buy eight P-81s marked India's biggest military aircraft deal with the United States and created a dangerous precedent for Russia, the main supplier of weapons and military equipment to New Delhi.
In 2005, the Indian Navy floated a tender for the best long-range surveillance aircraft. The tender involved Boeing, Lockheed Martin, several other major aircraft manufacturers and the Ilyushin Interstate Aircraft-Building Company (MAK Ilyushin), which eventually quit the race.
In 2007, MAK Ilyushin suffered another setback when the Indian side refused to accept upgraded Il-38SD ASW planes with the new Morskoi Zmei (Sea Serpent) search and target-acquisition systems and suspended payments under a $150 million contract.
In early 2008, New Delhi signed a $962 million contract for the purchase of six Lockheed Martin C-130-J Super Hercules turboprop military transport aircraft for its special forces after the Russian-Indian multirole transport aircraft (MRTA) project involving MAK Ilyushin was delayed.
Ruslan Pukhov, director of the Moscow-based Center for Analysis of Strategies and Technologies, said such blunders and miscalculations have irritated India and minimized Russia's chance of success in the $9 billion Indian Air Force tender for the delivery of 126 multirole fighters.
The tender also involves Russia's Aircraft Corporation MiG with its MiG-35 Fulcrum multirole fighter.
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