Russia assures Europe of gas supply, wants prepayment

Friday, April 11, 2014

Putin describes Ukraine debt as

Putin describes Ukraine debt as "intolerable," asks West to help pay it

MOSCOW - Russia guarantees to fulfill its commitments to supply natural gas to its European partners but needs prepayment from Ukraine, said President Vladimir Putin on Friday.

"… In line with the current contract, signed and valid since 2009, which no one canceled, Gazprom (Russian state energy company) is entitled to, and the government of the Russian Federation proposes switching to, prepayment,” he was quoted as saying by Russia’s ITAR-TASS news agency.

Putin said the deal meant Ukraine would receive next month the amount of gas it paid for that period.

But he described Ukraine's natural gas debt to Russia as "intolerable," saying that the West should help Kiev to clear it.

"Russia acts very carefully and cautiously and with respect for our partners. The problem does not relate to us but to securing gas transit via Ukraine," he said.

As for the US reaction to the letter he sent to European leaders Thursday, the Russian head of state said it was not favorable to read someone else's letters.

In a letter to 18 EU nations that import Russian gas, Putin threatened to cut off gas supplies to Ukraine over the country's unpaid bill, expressing concerns over Ukraine’s increasing debt to Russia.

He said Gazprom could be "compelled to switch over to advance payment for gas deliveries" and "completely or partially cease gas deliveries" if Ukraine fails to pay a $2.2-billion (1.6-billion-euro) debt.

Earlier on Friday, U.S. State Department condemned Russia for threatening to cut off gas supplies.

“Russia is using energy as a tool of coercion against Ukraine,” said Spokesperson Jen Psaki.

About 15 percent of gas consumption in the EU comes from Russia, with half of that piped through Ukraine.

On April 1, Alexei Miller, chief executive of Gazprom, announced a price increase of US$117 to US$385.5 per 1,000 cubic meters of gas to Ukraine.

This followed Russian President Vladimir Putin's orders regarding the terminations of a number of Russian-Ukrainian agreements including one that gave Ukraine discounts on gas prices in return for Russia's lease on the port of Sevastopol where its Black Sea Fleet is stationed.

Ukraine’s government called the decision ‘a declaration of economic war,’ and has refused to pay its debt or adhere to the price hike.

Meanwhile, Russian Prime Minister Dmitry Medvedev said Ukraine’s gas debt would hit US$16.6 billion in April.

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