Ukraine PM Warns "Prepare For Russian Gas Cutoff On Monday"

Tyler Durden's picture

Having set a deadline of June 16 (next Monday) for pre-payment of gas supplies from Russia to Ukraine, it appears Ukraine officials are willing to take the pain of no energy instead of paying what Gazprom is asking:

  • UKRAINE PM ORDERS GOVERNMENT, REGIONAL AUTHORITIES TO PREPARE ENERGY SECTOR FOR RUSSIAN GAS CUTS FROM MONDAY

The last negotiation had Ukraine willing to pay $326 and Russia asking $385, which Ukraine said "was not a market price." There are more problems for Europe though as Ukraine's PM has ordered the national regulator to revise 'transportation tariffs' for Russian gas via Ukraine (i.e. to Europe).

 

No deal...

  • *GAZPROM OFFER OF $385 FOR GAS `NOT A MARKET PRICE': KOBOLYEV
  • *GAZPROM NATURAL GAS PRICE FOR UKRAINE SHOULD BE LOWER: KOBOLYEV
  • *'NOT BAD' COMPROMISE OFFERED BY EC OF GAS AT $326: KOBOLYEV
  • *'WE WANT TO AGREE ON A FAIR PRICE' FOR GAS: NAFTOGAZ CEO

But...

  • *NO SET DATE FOR NEXT GAS TALKS WITH GAZPROM: NAFTOGAZ CEO

And so...

  • *YATSENYUK ASKS GOVT, NAFTOGAZ TO PREPARE FOR JUNE 16 GAS CUTOFF

As Novinite reports, negotiations are not going well,

Ukraine announced it would agree to pay USD 326 per 1000 cubic meters of gas following a three-way Brussels meeting over the dispute with Russia.

 

State-owned energy utility Naftogaz's CEO Andrey Kobolev said the price, which was offered by the EU, a mediator in talks between Kiev and Moscow, was acceptable, according to RIA Novosti.

 

This would however be a provisional step, with Kobolev describing it as a measure for "an interim 18-month period" during an arbitration procedure in Stockholm.

 

A potential breakthrough is now in sight after Ukraine turned down a fresh Russian proposal earlier this week which included a USD 100 worth reduction of the price Kiev is to pay for 1000 cubic meters.

 

This would have set the price at USD 385, which is still USD 100 up from what former Ukrainian President Viktor Yanukovych had managed to agree with Moscow. But a month after he left the country amid episodes of violence in the streets of Kiev, Gazprom introduced a 80% hike for Naftogaz and warned it would introduce prepayment for supplies (and thus virtually disrupt them) if the utility does not deliver on its debts to the Russian counterpart.

 

The current price is set at USD 485, an amount that Ukraine categorically refuses to pay. Russia, on the other hand, has claimed the total debt accumulated (partially as a result of Kiev's rebuff) is over USD 4 B.

 

Kiev's previous offer (rejected by Gazprom), on the other hand, was USD 268.5. In Kobolev's words, the price of USD 326 per 1000 cubic meters was just "the average" between Ukrainian demands and the status quo.

 

Gazprom is yet to comment on whether it would also agree to slash its latest proposal.

 

The Russian energy giant meanwhile announced it was still waiting for the transfer of a USD 1.9 B worth chunk of Ukraine's gas debt by June 16.

And so Ukraine is preparing for the worst case...

Ukrainian Prime Minister Arseniy Yatsenyuk instructs Naftogaz to file for international arbitration in Stockholm against Gazprom, according to statement on govt website.

Ukraine needs economically justified rate for gas transit

Yatsenyuk: “As the Russian Federation purposefully and unilaterally refuses to settle the conflict, energy security of Ukraine and the EU is undermined”

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eaglerock's picture

Market price?  If you were in a desert dying of thirst, what would the market price of a bottle of water be?  Exactly what bargaining power does Ukraine have?

Time for Titus's picture

They can threaten to stand down their FSA.

knukles's picture

Man o Chevas, this is turning into one massive global clusterfuck thanks muchly Fearless Messiah
Keep on Kumbayan'

Impoverished Psychologist's picture

Dig in Knucks... winter is coming.

 

DaddyO's picture

The winter of discontent swiftly followed by the American spring...

So what happens when the eyes of the world are diverted to the growing humanitarian crisis along the US border.

What happens when these new Americans decide they want to ally with Mexico and decide to vote to that end.

Is Nuland going to say F'em and spill 5 billion in CIA funds to quell the unrest?

Methinks not...

This Ukrainian outcome is her shining monument to the growing pile of evidence to US complicity in this debacle.

DaddyO

Latina Lover's picture

I guess this is what you call an Ukrainian threesome:

Sucking USA dick real hard, as you get it up the rear, Russian Style.

Latina Lover's picture

The Nuland/Nudelmaners are pushing Ukraine to commit economic suicide to fuck with Russia.  From the USSA perspective, this is a no lose proposition since either way they get to screw the Slavic sub human.

Impoverished Psychologist's picture

We need some T-shirts printed up...

 

'I was sacrificed in a US proxy war

F*&K YOU OBAMA'

 

 

ilion's picture

I don't understand the childish whining of Ukrainians. Just pay the gas bill and let everyone go on with their lives.

Latina Lover's picture

It is easy to understand their mentality, the ukie leadership are like USSA ziocons,  entitled, self centered, spoiled, criminal bitchez.

Pure Evil's picture

Did anyone notice that Nafto-gas is just one letter away from Nato-gas?

Antifaschistische's picture

I'm not good at this game.....is there a way to take a long position on Ukrainian Fire Wood?

Winston of Oceania's picture

They are the gatekeeper of pipelines to the EU, shut off Ukraine gas and forefit transit rights. EU will have no gas either which will get things going in a hurry, hard to say what happens from there but aggression from Russia will not be well met.

Winston Churchill's picture

The EU just needs to pay Ukraines gas bill.

Its as simple as that,except they are broke,just as Ukraine is.

Everybody wants Ukraine,but nobody is willing to pay for it.

Putin already has.

 

knukles's picture

Weeeeellllllll... Gazprom said the other day they'd take Euros, so no biggadeal.  Print.

MeMongo's picture

Hook line and sinker! Putin is sitting back casually sliding the chess pieces, and even now Iran is making our puffer in chief look bad. They announced today that they will militariy engae the U.S funded alciada along their borders! This just effectively kicked the tribe in the nuts cuz it gives the U.S even less reason to attack Iran! 

Canadian Dirtlump's picture

Just think, the new leader of Ukraine, the willy wonka of kiev, can burn candy to keep things going.

 

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

 

LOL.

Ghordius's picture

Putin got Crimea, didn't he? How much is Crimea worth? btw, there is a brand new charter flight from Moscow to Crimea ready for the summer vacation season

Canadian Dirtlump's picture

Unless I missed something, crimea voluntarily seceded and aceded in a legal manner not unlike kosovo. In addition Russia had already paid for the leasing of the port facliities.

Lest we forget, Crimea was given to then Ukraine as a member of the USSR for administrative reasons and was only removed from Russian control when the USSR unneccesarily fell apart after Yelstin the drunk bum sold out LOL.

Antifaschistische's picture

"except they are broke"    -    except when it comes to military spending...then, we can burn 20 billion or so pretending to protect the Ukraine.

Gaius Frakkin' Baltar's picture

It may be easy to sneer at the price this summer...

...a cold winter may bring a different attitude.

Oliver Jones's picture

Not only that...

Winter gas pipeline supply is not enough to meet demand, either. Countries need to have gas storage to meet demand in the middle of winter - and if they haven't been stocking up on gas over the summer, those reserves aren't going to be available in the winter.

Russia is playing the long game, and they're not just playing to win; they're playing for keeps.

El Vaquero's picture

 

Exactly what bargaining power does Ukraine have?

They think the US is going to save them?  They think the US will export nat gas to them? Of course, at real market rates, this would be @2x-3x the price, and we had to import nat gas last year.  In other words, short term, there is something that we could work out.  Long term, they toe Russia's line or they're fucked.

knukles's picture

Pretty please with some Ukrainian hookers and blow on top?

Canadian Dirtlump's picture

the facilities to do so are years away.

SDShack's picture

Here's my answer Senator Ukraine... NOTHING!

Smegley Wanxalot's picture

. . . . "Exactly what bargaining power does Ukraine have?"

 

Simple: "You will accept what we offer, or we will make our West Ukrainian people who hate your fucking Russian guts go without A/C in summer, freeze in the winter, not be able to go to work, and they will starve because we cant get them food that hasn't perished."

You don't see how much leverage there is against Russia in a threat like that?

CrimsonAvenger's picture

Ironically, that would work like a charm against the US administration. "People are not going to like us? Oh nooooooooooo!"

shovelhead's picture

So take that, you...you...POOPYHEAD!

C'mon Obama, open up that checkbook. Your new pals are counting on you.

The ECB is looking for change in the sofa.

Pure Evil's picture

Not to be what Otto Skorzeny called a "contrarian dickhead", but if they have no money for gas then where's the money to come from to kill pesky ruskies in E. Ukraine?

Urban Redneck's picture

No air conditioning in Europe in summer and the lights going dark at night in the "civilized" urban jungles. With the Russians... not so much.

bam's picture

WTF? Not market price? Execuse me:

BID: 326$

ASK: 385$

this is the motherfucking market right there! oh wait, there's only 1 supplier? i guess you gotta pay the ask. ROFL?

 

bonin006's picture

eaglerock - Bloomberg says the current NG price in the USA is $4.75, so WTF are they whining about $3.85?

The $2.85 they used to pay was because they were giving Russia a port in the Crimea. I guess they didn't think about that before letting the Nazi's take over.

http://www.bloomberg.com/energy/

 

Time for Titus's picture

$hit's gettin' real in Ukraine.

jal's picture

I think that the demand is outstripping the ....

The price of energy is not going down

alexcojones's picture

But chocolate is a good source of energy, right?

dsty's picture

seems to be going as planned

Winston Churchill's picture

Add mail order brides into GDP, should make up the difference.

NOZZLE's picture

Good, that and the tanks, heavy arms, manpads and anything else Putin can send to slaughter the Nazi filth enabled by our fucked up State Department would be fantastic.

The fucking media has hidden the butchery conducted by the Nazi filth enabled by our fucked up State Department first in Odessa and later in Donbass where they are targeting women and children for no strategic purpose other than to sow terror.

Winston of Oceania's picture

Does your first name start with a D?

The Russian dictator has blood on his hands as well.

NOZZLE's picture

No it does not, but you when you can offer an explanation for the destruction of Serbia and Kosovo by the US other than the lies spread at the time maybe I will listen.  Till then, clean up your own backyard and stop lecturing others on your so called democracy.

Duffy Duck's picture

I'm new here, but - you appear to be a god damned uninformed idiot parroting State Dept/NYT talking points like we haven't heard them all.

If you posit that Putin has "blood on his hands," which is hard to dispute, I hope you'll accept that Obama, and Bush before him, are swimming in blood.

With Ukraine, Russia at least has a cognizable national security and national (as in the Russian people in borderlands) interest.

WTF vital interest do you think the US has, asshole, other than $ supremacy and NATO encirclement?

Winston of Oceania's picture

You have some Putin dripping off your chin...

Duffy Duck's picture

Hackneyed and homophobic all at once!  Good for you - you really showed me!  I've sure learned not to tangle with someone of your intellectual capacity and wit!

 

Cookie?

Winston of Oceania's picture

How would I know what your sexual preference is or what sex you are. Go back to the bottled Ivan...

simplejack's picture

 

 

how much do you get paid for this type of work?  can I get a job too?

 

is it nice getting paid to let other people tell you what to think?

RafterManFMJ's picture

What's worse is when you PAY someone to tell you what to think; when you pay someone to lie to you, and to subvert your life and family. I like to call these people 'cable subscribers.' You might even know or be related to some of this filth.

Bioscale's picture

Tyler, would you please delete this motherfucker?

Gadfly's picture

I second the motion.  There has to be some limits.  This troll/idiot masquerading as a human being spews only hatred and raw emotion, no supportable facts.