Ukraine admits withholding gas from Europe - Yahoo! News

KIEV (AFP) - Ukraine has been withholding some Russian natural gas exports meant for customers in Europe, where several countries have reported falls in gas supplies amid a severe cold weather snap, an official with Ukraine's state-owned energy firm told AFP.

"We have in fact allowed the withholding of gas in excess of the contract during the past day," a Naftogaz official said on the condition of anonymity.
The official declined to say how much gas Ukraine -- which transports the vast majority of Russian gas exports to Europe -- was using over and above its agreed contract with Moscow.
"But we are certain that according to monthly totals, Ukraine will withhold exactly the volume agreed with Gazprom," the official said.
Earlier, a spokesman for Ukraine's Prime Minister Yury Yekhanurov denied charges by Russia's state-owned Gazprom giant that Kiev was withholding European supplies.
Although gas consumption in Ukraine has risen to record levels because of a severe cold snap gripping the country, "the increase of gas use in Ukraine has not at all affected the carrying out of our transport obligations," spokesman Valentin Mondrievsky told AFP.
Earlier on Monday, Russia's state-owned Gazprom monopoly admitted for the first time that it was not entirely fulfilling its contractual obligations to clients abroad because Ukraine was retaining some of the exports.
"You can call it withholding or taking, legal or illegal -- call it whatever you like," Gazprom's deputy chief Alexander Medvedev said in an interview with Russian television networks, extracts of which were broadcast Monday evening.
"But what is happening is that gas is remaining in Ukraine at higher volumes than envisioned. This prevents us from fully fulfilling our obligations to our foreign customers," he said.
Around 80 percent of Gazprom's exports to Europe pass through a pipeline network located on Ukrainian territory.
Temperatures in some parts of the country have plunged to lower than minus 30 C (minus 22 F), placing the country's energy systems under enormous strain.
The Ukrainian premier said Ukraine had consumed a record 407 million cubic meters of gas in the past day, some 43 percent more than during an average winter day when temperatures hover around 0 C (32 F).
Tensions between Russia and Ukraine have persisted over a new gas pricing deal signed by the two sides on January 4 that resulted in the near-doubling of the price Ukraine pays for natural gas.
European countries including Italy, Austria, Poland, Hungary, Croatia, Slovakia, Romania have recently reported drops in supplies of gas shipped to them by Gazprom.
Bosnia said Monday its supplies had been curtailed by one-fourth for the past five days.
Gazprom's travails were compounded Sunday when explosions on a section of pipeline in southern Russia halted gas supplies to another ex-Soviet republic, Georgia, where President Mikheil Saakashvili accused Moscow of deliberate disruption to his country's energy supply.
The company used an alternative pipeline route through neighboring Azerbaijan to restore some supplies to Georgia on Monday.
Gazprom had previously stated that it was fulfilling all of its basic gas delivery obligations to clients in Europe but was not in a position to meet their demands over and above those obligations, due to severe cold weather gripping Russia and soaring demand at home.
The gas price dispute with Ukraine flared last month when Russia said it would start charging its neighbor 230 dollars per 1,000 cubic meters of gas -- more than quadruple the 50 dollars it had previously charged -- from January 1 to bring Ukraine's rates into line with European market rates.
Ukraine balked at the 230-dollar price -- the average price in Europe is around that level -- only to see its gas supply from Russia briefly turned off on New Year's Day, forcing experts from the two sides to hammer out an emergency compromise.
Under the January 4 deal, Ukraine, which produces and sells some gas on its own, buys all its gas imports through an intermediary that sells a mix of Russian gas and gas from the Central Asian republic of Turkmenistan. It pays 95 dollars per 1,000 cubic meters of gas.
At the same time, Gazprom receives the 230 dollars per 1,000 cubic meters -- the price it had demanded from Ukraine -- from the same intermediary, which sells gas both to Ukraine and other clients in Europe.