BIG RUSSIAN GAS SURPRISE!

On October 2 Gazprom warned Ukraine via mass media that it would reduce gas deliveries from November onwfard, unless Ukraine pays $1.3 billion dollar worth of arrears to Gazprom. According to company spokesman Sergei Kupriyanov, these arrears accumulated for gas supplied during the nine-month period since January 1, 2007.

Characteristically, Gazprom resorted to the media weapon before informing the Ukrainian government or presidency. Kyiv had not yet been officially notified by October 3, when Prime Minister Viktor Yanukovych dispatched Fuel and Energy Minister Yuriy Boyko to Moscow for emergency talks with Gazprom. They agreed that Ukraine would pay those arrears until November 1 to avoid a cut in supplies.

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The political link is also apparent between Gazprom’s sudden announcement and the outcome of Ukraine’s September 30 parliamentary elections. Russia’s ambassador to Ukraine -- and former Gazprom chief -- Viktor Chernomyrdin warned during a Kyiv conference on September 27 that talks were ongoing on the gas price and “everything will depend on who will come into the Ukrainian government” after the elections.” Alluding to debt settlement, he served notice that joint control of Ukraine’s gas transit system is more in Ukraine’s than in Russia’s interest; that it is “first of all a matter of state interest”; and that, should Ukraine decline to settle the debts by sharing control of transit pipelines, Russia would switch its gas export routes to seabed pipelines [i.e., Baltic and Black Sea], leaving Ukraine “with scrap metal: there will be the pipeline, but what will it carry?” (Channel Five TV [Kyiv], UCIPP Ukraine Monitoring, Interfax-Ukraine, September 27).

While this latter part of the warning involves an element of bluff, the state-driven policy approach can hardly be clearer. Russian Deputy Prime Minister Sergei Naryshkin also unveiled a Kremlin-driven approach when discussing gas deliveries to Gazprom by Turkmenistan on October 3 in Ashgabat. Naryshkin “drew attention to the order given by the Presidents of both countries, to Russian companies first of all, to carry out active work” on that issue (Interfax, October 3).

In light of Chernomyrdin’s warning, it seems that Gazprom’s sudden debt-collection demand represents an instant response to the Yulia Tymoshenko Bloc’s electoral success and the prospect of her playing a leading role in the Ukrainian government. During her two years in the opposition, Tymoshenko has vowed to clean up the gas business in Ukraine. She is seen as a threat to Gazprom’s and RosUkrEnergo’s interests, and she is also as a major obstacle to any handover of control over Ukraine’s gas transit system to Russia. Earlier this year Tymoshenko shepherded through parliament legislation that bars such handovers (see EDM, February 7); but elements in the government such as Boyko make no secret of their search for ways to circumvent that legislation.

Oh gosh. The Orangers seem to win and the Russians start sabre rattling. Big surprise.