Ukraine: Shells fall on Donetsk International Airport
VIDEO ID: 20141029-031 Shells could be seen raining from the sky over Donetsk International Airport, Wednesday. Fighting continues to rage for control of the airport, with dozens of soldiers...
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Ukraine: Shells fall on Donetsk International Airport - Video
As temperatures have dropped below freezing in Ukraine and relations with Russia have come under new strains, energy officials from the two former Soviet republics were meeting in Brussels on Wednesday for a last-ditch attempt to negotiate a resumption of Russian natural gas deliveries for the winter.
Ukrainian Energy Minister Yuri Prodan and his Russian counterpart Alexander Novak met in the Belgian capital amid low expectations that the talks brokered by European Union Energy Commissioner Gunther Oettinger would move the adversaries from their standoff over Ukraine's debts for previous gas supplies and Russia's threat to cut deliveries to Europe as well.
Ukraine owes Gazprom $5.3 billion for supplies that were cut off in April following months of nonpayment, according to the Russian energy behemoth.
The calculation of Ukraine's debt is one of the issues frustrating an agreement. Moscow offered Kiev a 30% discount on gas imports late last year as an inducement to then-Ukrainian President Viktor Yanukovich to keep the country's economy closely tethered to Russia's instead of signing an association agreement with the European Union.
That deal was scuttled after a pro-Europe rebellion ousted Yanukovich in February. An angry Kremlin then seized Ukraine's Crimean peninsula, home to Russia's Black Sea fleet and other defense installations, and canceled another gas rate cut for Kiev that had been part of the leasing agreement for the Kremlin's Crimean bases.
European Union-mediated talks have secured agreement from Moscow to sell gas to Ukraine at $385 per 1,000 cubic meters. That is a compromise between the heavily discounted rate in place when Yanukovich was in power and the price demanded after relations between the countries soured earlier this year with the Crimean annexation and Moscow support for separatist militants in eastern Ukraine.
The negotiators entered Wednesday's talks in Brussels under new clouds of contention as fighting resumed between Ukrainian government forces and the Russian-backed militants occupying major industrial sites in eastern Ukraine. More than 3,700 people have been killed in the conflict that has cleaved the Donetsk and Luhansk regions from the Kiev government's control.
Russian Foreign Minister Sergei Lavrov on Tuesday angered Ukrainian leaders and their Western allies by saying that Moscow would recognize separatist elections planned for Sunday in areas of eastern Ukraine controlled by the militants.
The leaders of the self-proclaimed independent republics of Donetsk and Luhansk blocked voters from taking part in Ukrainian parliamentary elections this past Sunday, contending the territory they hold is no longer part of Ukraine.
In an interview with Germany's ZDF television, EU mediator Oettinger gave the gas talks a 50-50 chance of success in producing an agreement. The New York-based Eurasia Group consulting firm put the likelihood of failure at 60%.
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Ukraine, Russia struggle to resolve gas dispute as winter looms
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?
Ukraine resumes talks today with Russia on securing winter gas supplies after voters in the war-torn country overwhelmingly elected pro-European parties to power.
Ukrainian Energy Minister Yuri Prodan is meeting Russian counterpart Alexander Novak in Brussels for negotiations brokered by European Union Energy Commissioner Guenther Oettinger, who told Germanys ZDF TV theres a 50 percent chance of a deal.
Ukraine and the EU are seeking to avoid a repeat of 2006 and 2009, when disputes over gas volumes and prices prompted Russian exporter OAO Gazprom (GAZP) to cut supplies, leading to shortages across Europe amid freezing temperatures.
Standoff in Ukraine
A crisis is possible at any moment, said Alexey Grivach, deputy head of the Moscow-based National Energy Security Fund consulting company. Ukrainian elections have passed, which removes excessive rigidity from talks, but Ukraine is still lacking money for future gas.
Gazprom stopped supplying its Ukrainian partner, NAK Naftogaz Ukrainy, in June because of unpaid bills as fighting raged between pro-Russian rebels and government forces in the countrys easternmost regions. The 28-nation EU, which depends on Russian gas piped via Ukraine for 15 percent of its supply, proposed an interim deal last month to restart deliveries.
The talks come as Ukrainian President Petro Poroshenko moves to form a government among the pro-European parties that gained a constitutional two-thirds majority in the parliamentary election. Poroshenko told two of the biggest winners, Prime Minister Arseniy Yatsenyuk and Lviv Mayor Andriy Sadovyi, heading the Peoples Front and Samopomich parties, respectively, that he wants a government formed within 10 days.
Poroshenkos own bloc has 21.8 percent of the vote, neck-and-neck with the Peoples Front, taking 22.2 percent, with 98 percent of ballots counted. Final results are due today or tomorrow.
If Russia sought to drag out gas talks in hope of getting a more pliable premier than Yatsenyuk, it has failed, said Alexander Paraschiy, an analyst at Concorde Capital in Kiev.
Yatsenyuk said before the vote he was quite skeptical Ukraine could build ties with Russia after a seven-month conflict that the United Nations says has killed 3,700 people and displaced 1 million. While the Kremlin denies involvement, Ukraine, the U.S. and EU blame Russia for fueling unrest.
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Ukraine Seeks Russia Gas Deal After Pro-Europe Poll Win
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