Monday, September 22, 2014

Europe Ready to Suffer from Cold to Please US > - Strategic Culture Foundation

The Ukraine-Russia gas conflicts have a history. Usually the differences have been narrowed down or resolved before the threat of collapse in Europe became imminent. Now there is a big chance Europe will be left without heating in the coming winter.

Ukraine, Russia gas dispute

Since the February coup Kiev has been doing its best to sever ties with Gasprom. The Russian gas deliveries were fully stopped on June 16, 2014. The controversy is to be tackled by the Stockholm Court. Ukraine wants the price to go down to 268, 8 dollars for a thousand of cubic meters. Gasprom insists Ukraine should redeem its debt of 4, 458 billion dollars.

As soon as a hope for reaching an accord appears Ukrainian negotiators use the tactics of bringing the achieved results to naught by putting forward new conditions. For instance, this August Russia offered to return the 100-dollar discount and make the price go down to 385 dollars a ton. In turn Kiev offered to establish two different prices: a winter price of 385 dollars, and a summer price equal to 320 dollars. Kiev had planned to make the offer at the Russia-European Union-Ukraine round of talks slated for September 6. But suddenly it all had been changed just a week before the talks started. Now Ukraine wants the price to be the same as at the spot market minus transit costs. The difference between spot market and long-term contracts prices is significant. The offer is unacceptable. Ukraine also wants the gas terminals be moved to the eastern border. It will make Gasprom reconsider all the concluded contracts with European partners. The forever changing position of Ukraine made the talks stymied.

On September 10 Petro Poroshenko signed a new law on reforming national transportation system. Under the document, the operational and technological control functions are transferred from the state company to an operator that must be approved by the Ministry of Energy and Coal Industry. Operator companies must be those founded and owned only by the Ukrainian state or owned or belonging to residents from the European Union, the United States or the European Energy Community. In this case, the state’s share may not be less than 51%, with the rest to belong to other gas transportation system operators or members of the European network of operators.

On September 12 a new Ukrainian law on sanctions became effective. It allows Ukraine to stop gas deliveries to Europe. Everyone knows what the termination of gas supplies may lead to. The intention to sell the transit system will also entail grave implications. Being the mostpowerful pipeline in the world it starts to lose the importance because of Kiev’s myope policy. In 2007 115 billion cubic meters of Russian gas was transported via Ukraine. It was only 36, 571 billion in the first half of 2014. Even if nothing were changed the total gas deliveries would be 73, 14 billion cubic meters by the end of the year as North Stream has become operational and the territory of Belarus is used for transportation. After the projects are implemented 55 billion cubic meters will be delivered via North Stream, the Yamal-Europe pipeline’s full capacity is 33 billion. The figure is and 63 billion cubic meters for South Stream. It will bring the total capacity to 151 billion cubic meters making it exceed the gas supplies going through the territory of Ukraine in 2007. It is also twice as much as predicted for 2014. The estimates don’t take into account the second pipeline of the route being in the process of negotiation since 2013.

The modernization of the pipeline offered for sale to Europeans requires the investments equal to 19, 5 billion dollars. It makes meaning only in case of stable supplies on the part of Russia. Nobody can say for sure if it would be the case as crisis hits Ukraine.

Complete story at - Europe Ready to Suffer from Cold to Please US > - Strategic Culture Foundation

No comments:

Post a Comment

All comments subject to moderation.

Recommended Reading via Amazon

If you're seeking more information about how the world really works, and not how the media would want you to believe it works, these books are a good start. These are all highly recommended.

If you don't see pictures above, you likely have an adblocker running.  If so, here are the links.

1. The Shock Doctrine - Naomi Klein
2. Confessions of an Economic Hit Man - John Perkins
3. Manufacturing Consent - Edward Herman, Noam Chomsky
4. Gladio - NATO's Dagger at the Heart of Europe - Richard Cottrell
5. Profit Over People - Noam Chomsky
6. Soviet Fates and Lost Alternatives - Stephen Cohen
7. The Divide - American Injustice in the Age of the Wealth Gap - Matt Taibbi

How this works.  Follow one of the links.  Should you decide to buy that item, or any item, I get a small percentage, which helps to maintain this site.  Your cost is the same, whether you buy from my link or not.  But if the item remains in the cart too long, I don't get a thing.  
Related Posts Plugin for WordPress, Blogger...