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    Russia-Ukraine Gas Conflict (292)
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    Russia and Ukraine have signed a landmark agreement, but the gas deliveries have yet to commence. Kiev's Naftogaz has to pay for its debts to Gazprom and must prepay for any gas deliveries from Gazprom.

    MOSCOW, November 10 (Sputnik), Stanislav Fisher – More than a week has passed since a landmark gas agreement was signed by Russia, Ukraine and the European Union, but the gas deliveries have yet to commence. Even the staunchest optimists should start questioning the viability of the deal clinched in Brussels at the end of October.

    The terms of the deal offer little leeway for Ukraine. Kiev's Naftogaz has yet to pay for its outstanding debts to Gazprom, according to a predetermined schedule, and must prepay for any gas deliveries from Gazprom. The first, 1.45 billion-dollar tranche of debt payments  has been paid by Kiev but it seems that the government of Ukraine can't find the money required to kick-start new deliveries from Russia.

    Why does it matter for Europe? Because Ukraine will inevitably start to “unlawfully divert” transit gas flows in order to cover its own consumption, leaving Europe literally in the cold. Despite being a supporter of European values, the country's Prime Minister Yatsenyuk has never shied away from blackmailing Europe, basically threatening to steal the gas transiting the country, if Brussels doesn't broker a favorable deal with Moscow. Yatsenyuk hinted that Ukraine “can't guarantee the transit”, if a deal is not reached and everyone got the message. If Kiev can't find the cash to pay Gazprom or doesn't want to pay Gazprom because Washington would like to escalate the conflict, then without a shadow of doubt, it can be predicted that Ukraine will start diverting the gas bought by the EU for its own consumption.

    It seems that the European media and politicians understand the gas deal signed by commissar Oettinger in Brussels in a way that is radically different from the way Kiev understands the deal. According to Oettinger's latest statements, the EU hasn't given Ukraine or Russia a formal financial guarantee that it will pay for the gas if Kiev defaults on the agreed payment schedule. However, Kiev and Moscow are likely to understand the situation differently, expecting the European taxpayer to pay for everything, even if no formal guarantee has been issued. A significant part of the Ukrainian political establishment and the country’s electorate believe that being European mean being Russophobic above everything else and therefore they expect to be paid for their Russophobia. That includes an implicit obligation on the part of the EU to pay for Ukraine's gas bills. A significant part of the Russian political establishment believes that Moscow should no longer subsidize a fiercely anti-Russian regime in Kiev and the EU should pay a steep price for helping bring Russophobes to power in Kiev via a violent coup. When asked about the specifics of the alleged guarantee provided by the EU to Kiev, Russian energy minister Alexander Novak said that he has no interest in finding out the specifics because the gas will only be delivered after prepayment.

    It is possible that Kiev doesn't have the money and it is obvious that neither IMF nor the EU has given Kiev additional funds to finance its gas consumption. Few people in Europe are considering the possibility that Kiev will not make any prepayments and will start diverting the gas bought by the European countries. In this case, trying to force Moscow to deliver gas to Kiev or to increase the supply will be absolutely futile, because the European Commission signed the gas deal in Brussels, explicitly accepting all of its clauses, including the payment schedule. Even if Ukraine manages to prepay for its gas for November and December, it is very likely that it will default on its final tranche of debt repayment, which is scheduled to occur before December 31st, prompting an immediate halt to supplies on New Year’s Eve. Then, the usual scenario will unfold, with Kiev diverting the European gas, the European media going into a frenzy and everyone blaming Moscow. Actually, the freezing Europeans should be blaming Washington for its reckless and cynical intervention in Ukraine, orchestrating a coup and then making both the European Union and Russia suffer from the behavior of its Ukrainian political puppets.

    Russia-Ukraine Gas Conflict (292)


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