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30 May, 2009 11:42

EU might finance Ukraine’s gas bills

Europe may step in to pay a $5 billion gas bill Ukraine owes to Gazprom, says Gazprom spokesman Sergey Kupriyanov in an exclusive interview with RT.

RT: Ukraine needs to buy gas now and store it to fill its supply system and ensure an uninterrupted flow of fuel to Europe this winter. Vladimir Putin appears to be worried by the situation, are you?

Sergey Kupriyanov: We’re obviously deeply concerned about this situation as well. We are actually trying to share this concern with our European colleagues now. If the Ukrainian underground storages are not filled properly now during the summer period, our Ukrainian colleagues would find it extremely difficult to fulfill their obligations on transporting gas.

RT: You may be used to chasing people who do not pay their gas bills – but this is a big one. How are negotiations with Ukraine progressing?

S.K.: As you nay know, the agreements we had signed in January provided for regular payments for each previous month to be made by the 7th of the next month. At the same time, only a certain share of gas which Ukraine has been buying from Gazprom now would be sold to consumers directly. The rest of gas would be stored in underground storage. Consumers would be paying for those volumes of gas later on. Today we are working on a solution to cover this gap.

RT: Vladimir Putin suggested an idea of giving the money to Ukraine indirectly via the IMF fund. Would the $10 billion loan be a way forward?

S.K.: As far as we know, representatives of the Russian government have been negotiating with EU leaders in order to determine the mechanism of a joint investment to resolve this financial problem.

RT: You've given a discount to Belarus and Ukraine already gets one too. Is there any further flexibility you could offer to Kiev if they can't pay now?

S.K.: Concerning the issue of Belarus, we are not talking as much of discounts as of the amounts of payment for transit, which is exactly the same as we’ve done for our Ukrainian colleagues. I’d like to note that we’ve been demonstrating our good-will in full measure. In particular, we’ve made the entire transit payment for the current year. We’ve not been applying fines which we could have been under the contract – that’s because the volume of gas consumed by Ukraine is much less than was provided for in the agreement. I have to emphasize we’ve been doing our utmost to accommodate our Ukrainian colleagues.

RT: Is there any long-term solution to these gas disputes between Russia and Ukraine?

S.K.: Legally we’d resolved these gas disputes already back in January. The agreements signed then clearly lay out the full scheme for our co-operation over the next 10 years. Now the most important thing is for our Ukrainian partners to stick to these agreements.

RT: What do you think of Italian Prime Minister Silvio Berlusconi's idea that European countries should pay some of this $5 billion bill? Will Europe agree to pay?

S.K.: We’ve been working on this issue right now. We’d like to inform our European partners of it. In spite of the fact that Naftogaz had promised to ensure gas transit next winter, they have to fill up their storages to be able to fulfill this obligation physically. It looks like we and our European partners should join our efforts to help them.

RT: Gazprom is building pipelines in the Baltic and Black seas – Nord Stream and South Stream – to bypass all transit countries and supply natural gas direct to its European customers. Is Gazprom doing anything else to decrease dependency on transit countries including Ukraine?

S.K.: The above-mentioned North Stream and South Stream are our largest projects. Moreover, we’ve been developing systems of gas underground storages in Europe. In particular, we have such storage facilities in Germany and Austria and we’ve been developing these new projects in Hungary, Serbia and Bulgaria.

RT: Are the problems with Ukraine and threats to European gas supplies boosting support for the Nabucco pipeline – which the European Union backs, to bring Central Asian instead of Russian gas to Europe?

S.K.: We do not consider Nabucco a competitor to our projects. First, we are aimed at different sources of supply. Second, we believe the degree of attention to Nabucco in Europe has been generally exaggerated. If this gas supply project to Europe is actually ever realised, its input would not be crucial anyway.

RT: The Western media claims that last winter's dispute harmed Gazprom's reputation as a reliable energy supplier. Has it affected Gazprom's relations with its customers?

S.K.: I would not deny the fact that Gazprom’s reputation has been damaged. But I’d like to emphasize that our immediate partners do realize that the situation had been a force-majeure one and that we couldn’t have fulfilled our obligations in full measure. Concerning the media, while those articles on Gazprom’s unreliability had been written, it’s as if a quarter of all journalists’ computers were working – due to Russian gas!