It's getting cold in Europe...

**rory_20_uk** · 01-08-2009, 15:21

Ukraine does seem to expect Russia to subsidise it - even as it turns its back on Russia.

Russia isn't a particularly friendly country. The UK and Russia have not been great friends for over 100 years. Today it is Ukraine's doing. But What if Russia one day decides that it wants to double prices overnight? Europe can freeze or pay.

Importing fuel from another country isn't a bad idea. Getting all one's power needs is.

The most frustrating thing is that this has happened not that many years ago.
I don't really care where the energy comes from: geothermal plants in Iceland, solar power plants in turkey, Wind, Wave, coal or nuclear - but the underlying feature should either be a plurality of sources.

**rvg** · 01-08-2009, 20:26

Russia as a supplier is by default responsible for honoring its deal with Europe. If Ukraine isn't cooperating, that is not Europe's problem, it's Russia's problem and they should deal with it even if it means building a new gas pipeline that would skirt around Ukraine.

**rory_20_uk** · 01-08-2009, 22:20

Nope. Russia has no obligations, as it is Ukraine who has contractual obligations to ship the gas through.

If Europe was in a stronger bargaining position they could stipulate demands, but as it is we've no choice.

There is a new pipeline being built to Germany BTW. These things do take time to build.

**rvg** · 01-08-2009, 22:25

Originally Posted by rory_20_uk

Nope. Russia has no obligations, as it is Ukraine who has contractual obligations to ship the gas through.

If Europe was in a stronger bargaining position they could stipulate demands, but as it is we've no choice.

There is a new pipeline being built to Germany BTW. These things do take time to build.

Ukraine didn't cut the supply though, Russia did.

**Sarmatian** · 01-09-2009, 00:15

The deal is a little more complicated. Ukraine pays 1/3 of the market price for gas. Russia wants market price eventually, also influenced by the orange revolution obviously. Russian position is, why should we subsidize your economy while you turn your back on us and seek Nato membership, let them subsidize you. Ukraine maintains that market price would ruin Ukranian economy. So the price is increased gradually and it is always a mess. Gazprom wanted about half of the market price, 250, while Ukraine said 201 is the top price they will pay. After some time, Russians basically said **** you, we want full market price - 450. Ukraine refused, Russia stops all gas intended for Ukraine. After that Russia says Ukraine is siphoning the gas intended for EU and after Ukraine refused to let Gazprom monitors check the situation, closes all valves until the supposed siphoning stops.

Russia also asked for independent monitors from EU but Ukraine initially refused. After some pressure it appears that EU monitors will go to Ukraine. Negotiations are in place and it is expected that everything will return to normal in a day or two. If it doesn't, we may have a disaster here in the Balkans. Most western Europeans have reserves for weeks, even months, but Balkan countries don't. All gas shipments in Serbia through Ukraine stopped. Our German and Hungarians friends allowed us to have a portion of what goes through other pipelines but that's a very short term solution. If this last more than a couple of days, we're in trouble. Bosnia is in even worse situation. Croatia a bit better, they produce 2/3 of the gas they need, but Bosnia is 100% dependent of Russian gas and Serbia about 84%....

**Alexanderofmacedon** · 01-09-2009, 05:05

Originally Posted by Sarmatian

The deal is a little more complicated. Ukraine pays 1/3 of the market price for gas. Russia wants market price eventually, also influenced by the orange revolution obviously. Russian position is, why should we subsidize your economy while you turn your back on us and seek Nato membership, let them subsidize you. Ukraine maintains that market price would ruin Ukranian economy. So the price is increased gradually and it is always a mess. Gazprom wanted about half of the market price, 250, while Ukraine said 201 is the top price they will pay. After some time, Russians basically said **** you, we want full market price - 450. Ukraine refused, Russia stops all gas intended for Ukraine. After that Russia says Ukraine is siphoning the gas intended for EU and after Ukraine refused to let Gazprom monitors check the situation, closes all valves until the supposed siphoning stops.

Russia also asked for independent monitors from EU but Ukraine initially refused. After some pressure it appears that EU monitors will go to Ukraine. Negotiations are in place and it is expected that everything will return to normal in a day or two. If it doesn't, we may have a disaster here in the Balkans. Most western Europeans have reserves for weeks, even months, but Balkan countries don't. All gas shipments in Serbia through Ukraine stopped. Our German and Hungarians friends allowed us to have a portion of what goes through other pipelines but that's a very short term solution. If this last more than a couple of days, we're in trouble. Bosnia is in even worse situation. Croatia a bit better, they produce 2/3 of the gas they need, but Bosnia is 100% dependent of Russian gas and Serbia about 84%....

Where are you getting this information? I believe you, but I'm just curious. I haven't read in depth enough (yet).

**Fragony** · 01-09-2009, 09:20

Leave it to the russians to keep things interesting, gonna buy me an extra pair of socks!

**Sarmatian** · 01-09-2009, 15:26

Originally Posted by Alexanderofmacedon

Where are you getting this information? I believe you, but I'm just curious. I haven't read in depth enough (yet).

All sources really, TV, newspapers, internet. There's a wiki article about it, although it's the short version. Serbia signed a deal with Russia recently that involves selling them 51% Serbian national oil and gas company, South Stream pipeline deal and building a huge storage for gas in Serbia. There was a pretty heated discussion about it in the parliament so we were bombarded with information for several weeks, like how much they will pay, what's the price of gas, how much they pay Ukraine for transit etc etc...

It seems that the deal will be made soon. It is unclear whether only EU observers will be present in Ukraine or both EU and Russian. Russia wants her own observers there, too, although I don't think it's gonna be a stumbling block. It's in the interest of both sides that gas flow is not disrupted so there's no reason not to trust each other...

**Seamus Fermanagh** · 01-09-2009, 04:34

Originally Posted by rvg

Russia as a supplier is by default responsible for honoring its deal with Europe. If Ukraine isn't cooperating, that is not Europe's problem, it's Russia's problem and they should deal with it even if it means building a new gas pipeline that would skirt around Ukraine.

No enforcing authority can require Russia to honor its contracts if it does not wish to do so. Russia presumes that this embargo will put more pressure on Ukraine than Russia. Maybe so.