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Gazprom Warns Of "Repetition Of 2009 Gas Situation" In Ukraine

Tyler Durden's picture




 

We have discussed the sword of Damocles that is hanging over the heads of the Ukrainian (and European for that matter) people for some time. The dominant role that Russia plays in providing energy is becoming critical, however, as Gazprom notes:

  • *GAZPROM SAYS TODAY IS DEADLINE FOR NAFTOGAZ TO PAY FOR FEB. GAS
  • *NAFTOGAZ OVERDUE PAYMENTS AT $1.89B FOR GAS SUPPLIES: GAZPROM
  • *GAZPROM SAYS NAFTOGAZ ISN'T OBSERVING CONTRACT
  • *GAZPROM: UKRAINE DEBTS CREATE 'RISK OF RETURN TO SITUATION AT BEGINNING OF 2009' (when Gazprom cut off Ukraine gas supplies)

Of course, the US agreed to $1b bailout yesterday - but that's not supposed to be used as a direct transfer payment to the Russians.

 

Via Interfax,

The debt that Ukraine's Naftogaz Ukrainy owes for Russian natural gas has risen to $1.89 billion, Gazprom CEO Alexei Miller told journalists.

 

"In fact, this means that Ukraine has stopped paying for gas," Miller said.

 

"This is completely at odds with the provisions of the contract and international trade practice. For our part, we have always met and will meet our contractual obligations. But we can't supply gas free of charge. Either Ukraine repays its debt and pays for current deliveries or the risk of returning to the situation at the beginning of 2009 will appear. We will notify the Russian government concerning the situation that is taking shape," Miller said.

 

"Today, March 7, was the payment deadline for February's deliveries of gas to Ukraine. Gazprom has not received payment on the debt. Including the price discount in effect in the first quarter, the overdue debt for gas has increased significantly and now totals $1.890 billion," he said.

It would appear this is the most important map in Europe once again...

 

and what happened in 2009...

Gazprom demanded a price hike to $400-plus from $250, Kiev flatly refused, and on New Year's day 2009, Gazprom began pumping only enough gas to meet the needs of its customers beyond Ukraine.

 

Again, the consequences were marked. Inevitably, Russia accused Ukraine of siphoning off supplies meant for European customers to meet its own needs, and cut supplies completely. As sub-zero temperatures gripped the continent, several countries – particularly in south-eastern Europe, almost completely dependent on supplies from Ukraine – simply ran out of gas. Some closed schools and public buildings; Bulgaria shut down production in its main industrial plants; Slovakia declared a state of emergency. North-western Europe, which had built up stores of gas since 2006, was less affected – but wholesale gas prices soared, a shock that was declared "utterly unacceptable" by Brussels.

Forget those sanctions...

The market is not happy - Ukraine is not fixed as June 2014 bond yields soar to 47%!!

 

and German stocks are tanking...

 

 

The acting Premier is in panic mode:

  • *UKRAINE NEEDS `URGENT' FINANCIAL AID, PREMIER YATSENYUK SAYS
  • *UKRAINE SEEKS TO END TALKS WITH IMF AS SOON AS POSSIBLE: PM

We suspect, as the bond market makes clear, that any IMF money will go direct to Gazprom and not to debt repayment

 

 

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Fri, 03/07/2014 - 10:09 | 4520877 Flakmeister
Flakmeister's picture

I'll take notice when Putin shuts down NordStream....

Fri, 03/07/2014 - 10:14 | 4520900 johnQpublic
johnQpublic's picture

Of course, the US agreed to $1b bailout yesterday - but that's not supposed to be used as a direct transfer payment to the Russians

 

 

and people on welfare arent supposed to depend on it forever

'supposed to' and reality rarely meet

Fri, 03/07/2014 - 10:33 | 4520967 Occident Mortal
Fri, 03/07/2014 - 10:49 | 4521028 gmrpeabody
gmrpeabody's picture

Actually..., cold olive soup is on the Friday night menu in our home.

Fri, 03/07/2014 - 11:07 | 4521114 TruthHunter
TruthHunter's picture

"Actually..., cold olive soup is on the Friday night menu in our home."

 

And?  Then you get Russian Gas or Italian gas?

Fri, 03/07/2014 - 10:52 | 4521034 merizobeach
merizobeach's picture

"Of course, the US agreed to $1b bailout yesterday - but that's not supposed to be used as a direct transfer payment to the Russians."

Yeaaaah, um, I'm gonna need you to go ahead and come into the office on Saturday... and also Sunday, so, um, see you at nine o'clock [so you can raise that bailout by an extra $0.89 billion!]

Fri, 03/07/2014 - 11:52 | 4521289 Uni
Uni's picture

Where I live cold soup is quite popular (and tasty)

 

http://www.gaspadine.lt/patiekalas/saltibarsciai.html

 

 

Fri, 03/07/2014 - 13:01 | 4521550 LMAOLORI
LMAOLORI's picture

 

 

They could pay for it out of this couldn't they?

Ukraine signs $10 billion shale gas deal with Chevron

 

 (Destablized for fracking lol)...

 

Ukraine crisis is about Great Power oil, gas pipeline rivalry
Fri, 03/07/2014 - 10:36 | 4520988 john39
john39's picture

the kagens and their role in subverting U.S. foreign policy exposed:

http://www.bollyn.com/14562/

Fri, 03/07/2014 - 10:51 | 4521031 ThisIsBob
ThisIsBob's picture

And if they won't use that USA account money for gaz won't it  free up a billion somewhere else?

Fri, 03/07/2014 - 11:02 | 4521090 cowdiddly
cowdiddly's picture

Free up What money. lol their broke. Once again, Who runs Bartertown bitchez?

Fri, 03/07/2014 - 11:05 | 4521102 merizobeach
merizobeach's picture

I don't think it works like that.  I'd guess they're broke, and haven't billions laying around anywhere.  Hence the bailout (which, apparently, still won't keep the stove lit unless they're burning wood).

Fri, 03/07/2014 - 10:09 | 4520880 machineh
machineh's picture

GAS, bItCHez!

Fri, 03/07/2014 - 10:15 | 4520909 SilverIsKing
SilverIsKing's picture

Yo Kerry, while you're at it, buy Putin some hookers and blow. Just put it on my account. Yeah, same as the $1B.

Fri, 03/07/2014 - 10:20 | 4520930 GetZeeGold
GetZeeGold's picture

 

 

.....prices will necessarily rise.

Fri, 03/07/2014 - 10:46 | 4521017 Urban Redneck
Urban Redneck's picture

MUST. . . PRINT. . . MOARRRRRR ! ! !

Fri, 03/07/2014 - 10:10 | 4520888 Sufiy
Sufiy's picture


US Dollar Slides To The New Low 79.51 As Ukraine Situation Moves To Economic Warfare

  US Military Complex can not be challenged by anyone in the open conflict, but once things are moving into the field of asymmetric economic warfare tactics of Financial Wars U.S. has a problem. Economy can not really handle any external shocks now, Bubble in the equity markets is not translating into the healthy growth so far. Any serious correction in the market can bring very weak economic data further in the proximity of potential recession. And this is where Ukraine situation is coming so handily to the FED's rescue out of Taper. Do you really think that the banks want the tigthening of the money supply now? FED wants Weak US Dollar, FED wants Inflation and FED is ready to pause Taper at any excuse now. Further escalation around Ukraine situation will provide this excuse right in time when the economic data will be turning even weaker than now.

 

http://sufiy.blogspot.co.uk/2014/03/us-dollar-slides-to-new-low-7951-as....

Fri, 03/07/2014 - 10:20 | 4520928 disabledvet
disabledvet's picture

Bwhahahahaha. The USA is the largest energy producer in the world. And the largest food producer. "Ukraine needs to be secured right now."

Russia has their "War in Crimea." The EU moves to secure the bulk of Ukraine's territorial integrity.

Putin...if he is to do anything here....needs to act immediately.

Of course so does the EU. "Ukraine must remain whole and open for business."

Fri, 03/07/2014 - 10:28 | 4520961 LawsofPhysics
LawsofPhysics's picture

Yes, Putin knows he must move quickly, and that's why he is.  Many people don't understand this.

However, he can move quickly.  As for the stuffed crimminal shirts in the west, not so much.

 

Now remind us, what is the DEBT:GDP of say the U.S.S.A. and the E.U. compared to the DEBT:GDP of say Russia and China?

Tick tock...

Fri, 03/07/2014 - 12:18 | 4521421 WMM II
WMM II's picture

"Now remind us, what is the DEBT:GDP of say the U.S.S.A. and the E.U. compared to the DEBT:GDP of say Russia and China?"

 

since the 1998 default by Russia?

 

:)

 

WallowaMountainMan

Fri, 03/07/2014 - 10:12 | 4520891 Chupacabra-322
Chupacabra-322's picture

"Of course, the US agreed to $1b bailout yesterday - but that's not supposed to be used as a direct transfer payment to the Russians."

But, but, wait. What about the $5 Billion the Criminal UNITED STATES, CORP. INC. forked over back in December with a visit from Criminal Foreign Agent McCain?

Fri, 03/07/2014 - 10:18 | 4520918 toady
toady's picture

That went to the Ukrainian ex-President. Something about a private island and fifty years payroll for private security.

You didn't think he'd take time to pay the bills before he left, did you?

Fri, 03/07/2014 - 10:35 | 4520980 Independent
Independent's picture

If you mean Nuland five billion that money is sitting in offshore accounts and onshore accounts in Swiss and Israel.  Remember all this money never has to be accounted for how its spent, just like TARP.  Its free money for dual citizens to have a GOOD TIME and become uber wealthy

Fri, 03/07/2014 - 10:44 | 4521010 Chupacabra-322
Chupacabra-322's picture

Perhaps it's also parked at the local friendly Criminal IMF. The funds never really go directly to the Ukraine or its people. John Perkins author of "Confessions of an Economic Hitman" confirmed as much.

Fri, 03/07/2014 - 10:35 | 4520983 oak
Fri, 03/07/2014 - 10:14 | 4520893 Dr. Engali
Dr. Engali's picture

Don't worry Putin. The BernankinYellen is printing you up a check right now.

Fri, 03/07/2014 - 10:16 | 4520906 NoDebt
NoDebt's picture

No, see, that's impossible because of this:

"Of course, the US agreed to $1b bailout yesterday - but that's not supposed to be used as a direct transfer payment to the Russians."

So, as you can see, there's no way that can happen.  No way.  Impossible.

Fri, 03/07/2014 - 10:13 | 4520896 disabledvet
disabledvet's picture

I'll take notice when Ukraine shuts of Nords Stream.

The ruble has already collapsed so obviously you have a massive inflation problem in Russia.

Any cut off in of anything in Ukraine means food prices soar in Europe at large.

Fri, 03/07/2014 - 10:26 | 4520956 Flakmeister
Flakmeister's picture

Nordstream goes nowhere near the Ukraine...

Fri, 03/07/2014 - 10:35 | 4520986 Rip van Wrinkle
Rip van Wrinkle's picture

But doesn't Draghi WANT inflation?

Fri, 03/07/2014 - 10:14 | 4520898 Sudden Debt
Sudden Debt's picture

IF YOU ONLY HAVE MONEY FOR A COKE, DON'T ORDER A STEAK!!

that's what my father used to say and that should apply to everybody.

If you can't pay for the gas, don't order it.

Fri, 03/07/2014 - 10:20 | 4520912 Dr. Engali
Dr. Engali's picture

Hah! have you learned nothing? If you can't buy a steak you lever up your dollar , buy 10 cokes, re-hypothicate the cokes, and  buy a four course meal a hooker and a room.... maybe a couple hot pockets for good measure.

Fri, 03/07/2014 - 10:22 | 4520942 GetZeeGold
GetZeeGold's picture

 

 

Damn....you're pretty good at this.

Fri, 03/07/2014 - 10:16 | 4520914 johnQpublic
johnQpublic's picture

http://vimeo.com/50044167

 

again, but never stops being funny

Fri, 03/07/2014 - 10:17 | 4520915 thecoloredsky
thecoloredsky's picture

Problem is, in 2009 it was turned off from Jan 1-Jan 20 in the dead of winter. Now its March with higher temps which I assume makes less of an impact. I could be over-simplifying it though.

Fri, 03/07/2014 - 10:32 | 4520973 Debugas
Debugas's picture

actually Ukrain has enough of its own gas to keep people warm at winter. The problem is the industrial demand

 

Fri, 03/07/2014 - 10:18 | 4520916 waterwitch
waterwitch's picture

The FED is issuing a one-of-a-kind platinum coin, worth $1.8 BN--with Yanacovich's image on it.  That should suffice, don't you think?

Fri, 03/07/2014 - 10:27 | 4520920 krispkritter
krispkritter's picture

Get your free ObamaGas! Amazing.  Americans who are struggling to fill their tanks or heat their homes because of energy costs are paying for some other country's gas bill after 5 times more of their tax dollars were used to destroy their elected government.  Yeah, we're getting fucked alright.  And I haven't heard a peep about the billions that were dumped into the Ukraine and went missing. How about they find those umpteen billions and pay their own fucking bills...

Fri, 03/07/2014 - 10:21 | 4520924 LawsofPhysics
LawsofPhysics's picture

Who runs bartertown?  Shut the fucking pipelines down already.  If Russia was smart, they would keep those calories for their own businesses and industry (or exchange them for something fucking real (like gold or new technology).

Fri, 03/07/2014 - 10:58 | 4521059 Flakmeister
Flakmeister's picture

LOP, but Russia is not "smart", at least their oligarchs are not...

If anything the past 20 years has seen a rise in the dependence of the Russian economy on hydrocarbon exports... Now up to 70%... 

It is a easy skim for the kleptocrats, building something real is much harder and not nearly as lucrative in the short term..

By any objective measure, Russia is on its way to becoming Nigeria with ICBMs....

The Russian current accout is no great shakes either

http://www.tradingeconomics.com/russia/current-account

http://www.bloomberg.com/news/2013-12-31/russian-posts-smallest-current-...

They do have pretty impressive foreign reserves though, ~$500B...

Fri, 03/07/2014 - 11:22 | 4521115 LawsofPhysics
LawsofPhysics's picture

"By any objective measure, Russia is on its way to becoming Nigeria with ICBMs...."

and somehow you think this is a good thing?

They can still set the price and terms for selling those resources, period.  Sounds to me like it's time for the Russians to renegotiate all those contract.

Remember, when fruad it the status quo, possession is the law.

Fri, 03/07/2014 - 11:24 | 4521173 Flakmeister
Flakmeister's picture

Re: Nigeria,  not in the least....

The slow and steady concentration of the Russian economy makes it less resiliant and more suseptible to unrest... 

It takes a much smaller coup to effectively control things (not that I am predicting a coup anytime soon).....

========

Russia is literally tied at the hip to the EU, their oil and gas exports (80%) are constrained the pipeline system that aint't going to be revamped to flow East or anywhere else anytime soon... 

They can only play the game you suggest if they can find alternative buyers. Otherwise they suffer as well if the taps are shut...

In reality, the Ukrainian pipeline system is not an asset but more of a liability to the Russians... A captive 3% of GDP flows through the Ukrainian gaslines....

Fri, 03/07/2014 - 11:32 | 4521201 LawsofPhysics
LawsofPhysics's picture

There are plenty of alternative buyers.  China being the big one.

Fri, 03/07/2014 - 11:37 | 4521228 Flakmeister
Flakmeister's picture

How does it get there?

Fri, 03/07/2014 - 10:19 | 4520925 SpanishGoop
SpanishGoop's picture

Europe should pay Gazprom on an European Gazprom account and right after that block and confiscate the account.

"Hey, we paid the bill the rest is due sanctions".

 Win/win....or not.

 

Fri, 03/07/2014 - 10:26 | 4520958 slackrabbit
slackrabbit's picture

And just like I said in 2009..enjoy

http://www.youtube.com/watch?v=ZomwVcGt0LE

 

Fri, 03/07/2014 - 10:28 | 4520964 buzzsaw99
buzzsaw99's picture

those maggots are going to give my money to the ukraniums? you bastards!

Fri, 03/07/2014 - 10:30 | 4520968 Montgomery Burns
Montgomery Burns's picture

Rule *1 for (former) dope dealers.....Do not front!

Fri, 03/07/2014 - 10:51 | 4520993 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

That next bill will be double the US/EU has to subsidize if they want to keep the gas on, the contract is up....

 

Fri, 03/07/2014 - 10:42 | 4521001 hookah
hookah's picture

Wow Russian soldier really protecting Crimea https://www.youtube.com/watch?v=C-eFCKwP3qI

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