‘No transit country has the right to take consumers hostage’ – Putin

Russia says that Ukraine is deliberately blocking the resumption of gas supplies to Europe through its territory. Gas supplies to at least 15 countries have either been cut off completely or severely reduced.

“None of the transit countries have the right to abuse its transit status or to make use of it and take European consumers hostage,” Russian Premier Minister Vladimir Putin said. 

On Wednesday Putin hosted talks outside Moscow with his counterparts from Bulgaria, Slovakia and Moldova – some of the countries worst affected by the dispute.

Europe's dependence on Russian gas

“We would not like to clarify now who is right and who is wrong because we are not interested in the Russia-Ukraine bilateral row. We are pressing Ukraine as well. And I have told the Ukrainian Prime Minister that Ukraine is losing the trust of its European partners,” said Prime Minister of Slovakia Robert Fico.

Fico has urged Ukraine to settle the gas conflict as his country’s current gas supplies are limited to the next twelve days. If the situation is not resolved, an unprecedented crisis would hit Slovakia, according to Fico.

“We are not interested in your relations with Russia, we are interested in having gas,” Slovakian Prime Minister said at talks with Ukrainian Prime Minister Yulia Timoshenko. She, for her part, said that Ukraine had not received from Russia a request for pumping gas in the direction of Uzhgorod, from where gas is transported to European consumers.

Chronology of Russia-Ukraine gas war

The current gas cuts are the culmination of a long gas war between Russia and Ukraine, RT looks back at its latest chapter, starting back in October 2007 and the ongoing crisis, the effect of which is now being felt all around Europe.

Gas war chronology

EU observers, alongside journalists, are witnessing gas being pumped into the transit pipelines on the Russian side but it is being blocked somewhere on Ukraine's territory.

“We are still pumping gas with a pressure of almost 70 bars into Ukrainian territory. The consumption is nil, as you can see. Ukraine is not accepting our gas for further transit,” Gazprom observer Aleksey Fyodorov says.

Meanwhile, gas transit to Slovakia and Moldova may be organised under a swap scheme if Ukraine agrees, Gazprom CEO Aleksey Miller says.

He says if Ukraine daily supplies Slovakia with 20 million cubic metres of gas, Russia will compensate that amount to Ukraine.

The same scheme is also applicable to Moldova, Miller says.

Vladimir Putin said Moscow is disappointed that the gas transit monitoring agreement is being disregarded by Ukraine.

Putin said Russia has not only done everything possible to resume the gas supplies to Europe but also actually resumed it, while Ukraine is hampering the transit process, and the Russian PM “is ready to produce the documents that prove that.”

He stressed that Ukraine’s problems with transit “are their problems as a transit country and they must solve them.”

Earlier Naftogaz CEO Oleg Dubina said: “We are asking. We don’t have the technical ability for pumping up gas from underground storages,” as quoted by Itar-Tass news agency.

“After we come to terms with how much it costs, we will pay you for it,” he added.

Dubina admitted that process gas has always been included in the total amount of gas bought from Russia, which is different from what the Ukrainian side insisted on earlier.

President Medvedev has proposed to hold a summit of European countries that are consumers of Russian gas on January 17 in Moscow.

“We must discuss two issues: first we must put an end to this crisis and make Ukraine take all the required technical steps to re-start the transit. And second, we have to find a way not to be taken hostage again due to the political situation in another country,” Medvedev said.

Medvedev added: “I have invited Ukrainian president Viktor Yushchenko to come as well, but I haven't got his reply so far.”

Ukraine is blocking Russian gas flow to Europe – Gazprom

Gazprom CEO Aleksey Miller said that from January 1 Gazprom has lost $US 1.1 billion of profit that would normally come from gas exported under its contracts with European countries.

Russian President Medvedev said on the matter:

“Our country and a leading company cannot afford to lose such an amount of money in the current circumstances. There can be no more gifts. Those responsible, those who are to blame, must pay compensation for all this money, for all these lost profits.”

Miller said that on Thursday his company was only able to pump 1.633 million cubic metres of gas, but this fuel didn’t reach the European consumers as Ukraine was still blocking it from passing it further on.

Gazprom Deputy CEO Aleksandr Medvedev said that under these conditions there is no physical ability for the company to transport gas to Europe via Ukraine, and the responsibility for that is ‘totally with the Ukrainian side’.

He added that the European Commission representatives have defined the situation as force majeure.

“The Ukrainian side cynically informed us that their gas transporting system has been redirected to inner consuming. In this case any gas pumped into their system will not reach European customers,” Aleksandr Medvedev said.

At 10 AM Moscow time (8 AM CET) on Tuesday Gazprom gave the order to resume gas transit through the Sudzha station in Russia’s Kursk region which borders Ukraine. Gas totaling 76.6 million cubic metres a day was supposed to flow through Ukraine’s territory to supply the Balkan states, Turkey and Moldova with fuel.

Ukrainian President Viktor Yushchenko made a statement on Tuesday denying that Kiev had stolen Russian gas or was blocking its transit to Europe, despite the recent failure by Russia to make a test delivery through Ukraine.

“Ukraine has been and will be a reliable transit country, and it has not taken a single step to block Russian gas deliveries to the European Union,” Yushchenko said.

Meanwhile, Ukraine’s Party of Regions is demanding the start of impeachment procedures of Ukraine’s President Yushchenko and that Yulia Timoshenko’s Cabinet resigns immediately.

The leader of the Party of Regions Viktor Yanukovich will propose the motion at the Ukraine parliament’s plenary session on Thursday.

“It’s impossible to hear the truth nowadays. We have been given promises, sweet words, but now the authorities are afraid to look the people in the eyes. We need to create a special commission in parliament, which would investigate our government’s criminal actions during the gas dispute,” he said.

No gas since January 7

On January 7 2009, Ukraine shut all four pipelines that send gas to Europe, causing several countries to run out of fuel. Before that Ukraine was stealing the Russian gas bound for European consumers, according to Gazprom and the results of an independent monitoring by a national resource analysts’ group from Switzerland. After that Russia made a decision to stop gas supplies via Ukraine to prevent the illegal siphoning.

Ukraine also insists Russia should supply ‘process gas’ (maintenance gas needed to keep product flowing through the pipes) before it can guarantee the uninterrupted transit of supplies to Europe. However, Gazprom dismisses the idea, saying Ukraine has to pay for process gas or buy it elsewhere according to the contract between the Russian and the Ukrainian gas companies.

Europe’s reaction

'Unacceptable and incredible' – that's how the head of the European Commission has described the situation around the transit of Russia's gas supplies to Europe.

Jose Manuel Barroso also says if the row is not resolved soon, EU companies might take the matter to court.

Bulgaria's leader Georgi Parvanov says European countries really feel like hostages in the gas crisis.

On Tuesday, Romanian President Traian Basescu said responsibility for the cut-off rested with Ukraine.

Italian Prime Minister Silvio Berlusconi also said he supports Gazprom's position in the dispute.

European Commission President Jose Manuel Barroso has warned both the Russian and the Ukrainian energy companies that legal action may be taken against them unless they move quickly to restore gas supplies to EU clients.

Barroso has called on both Gazprom and Naftogaz to resolve their differences and for supplies to resume – and said that the EU would be looking for alternative delivery routes.

Mirek Topolanek, Prime Minister of the Czech Republic which currently holds the EU presidency, has proposed to work out a new energy security arrangement for Europe.