By ELENA MAZNEVA and OLGA TANAS
Russia, the worlds biggest natural gas exporter,
increased pressure on Ukraine over its $2.2 billion fuel debt
as US Vice President Joe Biden voiced support for the smaller
country to gain energy independence.
Russia will make Ukraine prepay for gas unless it starts
paying down the debt it has accumulated through March, Prime
Minister Dmitry Medvedev said Tuesday in the State Duma, the
lower house of parliament, in Moscow.
Gas for cash, he said.
Ukraine is seeking alternative energy sources to cut reliance
on Russia amid accusations that President Vladimir Putin uses
exports as a political tool. Ukraine gets half of its gas
from Russia and is a transit route for about 15% of
Europes annual consumption of the fuel, making energy a
key component of international tensions about the
Ukraines leaders change with kaleidoscopic speed,
while their policy
stays the same: wait,
well pay later, well agree, well bring in
ans, Medvedev said.
The Americans have already popped up with so-called new
gas. All this is a bluff in purest form.
Russia, the second-biggest gas producing nation after the US,
has scoffed at the shale boom and forecasts of American gas
exports, saying its too expensive to be viable. The US,
also the worlds biggest consumer of the fuel, plans to
start exporting liquefied natural gas (LNG) later this
Biden, in Kiev for a two-day visit, told Ukrainian political
leaders that US President Barack Obamas administration
will help Ukraine solve its energy supply issues so
that Russia can no longer use energy as a weapon against
Ukraine and Europe.
Imagine where youd be today if you said to the
Russians: keep your gas, Biden said.
The US unveiled a $50 million aid package to Ukraine,
including $11.4 million to support the integrity
of its planned May 25 presidential election, according to a
fact sheet issued by the White House.
The government in Kiev is seeking to diversify energy
supplies by buying gas from Slovakia, Poland and Hungary
using east-west pipelines in reverse. Fuel supplies from
Poland started on April 15, at levels amounting to about 3
percent of Ukraines domestic consumption. That is the
maximum capacity for gas shipments from Poland for now, NAK
Naftogaz Ukrainy and Polands Gaz-System said last week.
Talks on additional gas volumes from other countries are
still in progress.
Ukraine is open to US and European investments in energy,
including joint operation and upgrades of its gas pipeline
system, Prime Minister Arseniy Yatsenyuk said after meeting
Biden. The best answer to Ukraines energy
dependence on Russia would be the presence here of European
and American investors.
OAO Gazprom, Russias state-controlled gas exporter, has
sought a venture to operate the pipelines, which it uses to
ship half its Europe
Russia is ready to wait for a month before moving
Ukraine to prepayments, in line with their gas supply
contract, Putin said April 17. That was the same day the US,
EU and Russia reached an agreement in Geneva to ease tensions
in Ukraine. The accord is now showing signs of collapse after
violence over the weekend that left three dead, with
pro-Russian forces holding their ground in occupied
administration buildings in several eastern Ukrainian cities.
Ukraine has been boosting gas imports from Russia since
Putins statement on the prepayment deadline, to a level
more than double the average for April 2013.
Gas imports from Russia have reached almost 1.5 billion cubic
meters from the beginning of the month to April 20, according
to the Russian Energy Ministrys CDU-TEK unit data. That
is more than $700 million of fuel at a price of $485 per
1,000 cubic meters.
Gazprom raised the price it charges Ukraine by 81% to $485
this month, higher than for any EU nation as Russias
government canceled discounts after relations soured and
Ukraines debt mounted.
Russia has provided about $250 billion of aid to Ukraine
since the Soviet Union collapse, including through gas
discounts, because we are good, we are made this
way, Medvedev said.
Gazprom said its sure that demand for gas in the EU,
its top priority market, will rise in the long
term. The state-controlled company plans to build new gas
pipelines and liquefied natural gas project
s to supply the growing
European market and increase deliveries to the premium
The Moscow-based energy producer gained more than $60 billion
of revenue from Europe last year, providing a record 30% of
the regions gas consumption.
Gazprom also plans to sign a 30-year deal to supply pipeline
gas to China next month after more than a decade of false
starts as the crisis in Ukraine forces Russia to look for
markets outside Europe
We are now interested in diversifying supplies and now
more than ever, Medvedev said.
The US has threatened further penalties against Russia,
including measures targeting the energy industries. Widening
the EU sanctions depends as much as anything else on
the situation on the ground, EU spokesman Michael Mann
Russia has shrugged off the threat of such measures.
Imposing restrictions is a primitive path, it is a road
to nowhere, Medvedev said. In that case we can
manage with our own strength and we will prevail at the