Can Ukraine endure a winter without Russian gas?
Ukraine is staring down the very real possibility of a cold winter without much-needed Russian natural gas.
With temperatures already dropping below freezing in Kiev, officials are increasingly concerned about a lack of the vital winter heating fuel in the colder months ahead. Should it fail to strike a deal with Russia, its primary supplier, Ukraine will scramble to ration the limited supplies it has in storage. It is already working to expand flows of gas from its European neighbors to the west to compensate for missing Russian supply. It may also be compelled as it has in previous energy crises to siphon off Russian gas traveling to Europe through Ukrainian pipelines.
Either way, a lack of Russian supply in Ukraine combined with rising European demand for the fuel in cold weather could make for an expensive and dangerous winter across the Continent.
"Ukraine can survive without Russian gas through the winter, though [Ukraine's state-owned gas company] Naftogaz may be forced to reduce transit flow to Europe," Mikhail Korchemkin, head of Malvern, Pa.-based East European Gas Analysis, writes in an e-mail."There are not enough storage facilities along the pipeline route through Ukraine to Moldova, Romania, Bulgaria, Greece and Turkey. Bulgaria may be short of gas if it gets really cold."
Ukraine typically relies on Russia to meet half of its natural gas needs, and about half of Europe's Russian gas imports first flow through Ukraine. In June, Russia shut off supplies to Ukraine after the latter accumulated billions in unpaid gas bills. Ukraine, Russia, and the European Union met in Brussels Wednesday in another last-ditch effort to resolve longstanding disagreements over natural gas supplies.
The three parties reached a promising tentative deal earlier this month that would supply Ukraine with at least 4 billion cubic meters of Russian gas about what it needs to safely make it through the winter. There's even an agreement on the price: $385 per thousand cubic meters.
But Moscow, Kiev, and Brussels continue at loggerheads over the contractual and legal details of an agreement that could have long-term implications for Ukraine (and Europe's) energy dependency on Russia. Another stumbling block is how much Ukraine owes Russia for past gas supplies, and who will help cash-strapped Ukraine pay it off. Russia puts that figure at $4.5billion, while Ukraine and the EU say it's $3.1 billion.
European Energy Commissioner Guenther Oettinger told German television there was roughly a 50 percent chance of a deal being struck today.
"We need financial resources for the advance payment of new gas deliveries," Mr. Oettinger said, as reported by Reuters.
Even without a deal, there's still hope Ukraine can make it safely through the winter. But it will take careful planning, conservation, and support from Western neighbors.
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Can Ukraine endure a winter without Russian gas?