Russia Says Ukraine Took Gas Despite Cutoff; Sends More Tanks/Troops To Border

Tyler Durden's picture

The deadline passed on June 16th for Ukraine's payment for gas already provided and upfront 'pre-payments' for ongoing deliveries. So what the Russian Energy Minister wants to know is how Ukraine took 3.8mcm on June 19th, 4.5mcm on June 20th, and 1mcm on June 21st. It appears Ukraine is claiming the gas supplies are reverse flow from Europe but this has not stopped Russia as The Pentagon reports more Russian troops at the Ukraine border and that they are preparing to send more tanks.


Since the cutoff on June 16th, Ukraine has 'taken':

  • 3.8mcm on June 19
  • 4.5mcm June 20
  • 1mcm on June 21

According to Russia's energy minister.

As it appears Russia sends gas to Europe (via Ukraine) and Ukraine holds on to it - claiming it is "reverse flow."

Ukraine remains open...(of course)

Ukraine is ready to resolve a dispute with Russia over natural gas transit through bilateral negotiations, state-run energy company Naftogaz said Monday.


"I believe that we will try to resolve the issue through negotiations," Naftogaz Chairman Andrey Kobolev told reporters.

But Russia does not seem in negotiating mood...

“Neither the situation nor the Russian position has changed during these days [since the gas cutoff],” Energy Minister Alexander Novak said June 19 in Moscow. “We are waiting for the payment for Russian gas.” explains the state of play...

In an effort to ensure the flow of gas to the West, Ukraine’s parliament is considering legislation that would allow the country’s gas transit and storage facilities to be leased as joint ventures with the United States or EU member countries. Under the proposal, Ukraine would have a 51 percent share and foreign investors would be offered 49 percent.


Ukraine is now enduring its third Gazprom cutoff since 2006, and is looking for ways to reduce its reliance on Russia for energy. Still, Kiev needs the income from delivering Russian gas to Europe and wants to make its transit system more reliable.


As a result, acting Ukrainian Prime Minister Arseny Yatseniuk told parliament on June 19 that the joint venture, if approved, would mean an unbroken flow of fees from EU gas customers as well as investment income. He added, “If Europeans join this company, Russia will not build Southstream.”


Southstream is a pipeline that Gazprom is building to ship gas through southeastern Europe, across the Black Sea and on to Western Europe, bypassing Ukraine altogether. That would deny Ukraine of any transit payments it’s been receiving from the West.

And as that discussion is underway, this is happening:


“Russia has accumulated artillery at a deployment site in southwest Russia and we believe Russia might soon provide this equipment to separatist fighters” in Ukraine, Warren says


“It’s something that we’re concerned about”


He didn’t provide any estimate on numbers


DOD agrees with a NATO estimate that “at least a few thousand more troops” from Russia have been sent to Ukraine border, he says

And this is happening as Russian separatists accept the cease fire...


Which makes one wonder, what happens on June 28th?

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LawsofPhysics's picture

Physically shut down all pipelines through Ukraines already.  Plenty of paying customers in the East.

G.O.O.D's picture

Moar Woar Bitchez! Bullish- go long bombs and mines.

LawsofPhysics's picture

Unless the flow of gas stops, this is just more noise.

War is simply negotiation by other means.


Same as it ever was...

Haus-Targaryen's picture

Will putin just invade already!?

This foreplay is killing me. Besides, I have positions to cover.

CrashisOptimistic's picture

I don't think he wants to invade.  He doesn't want to feed them or heat them or anything else.

And invading doesn't get GAZPROM paid.  They are a basketcase.  GAZPROM wants to be paid and they aren't paying.

Shutting them off may be the only answer, or provide just enough for the European customers who get the transited gas and if any is stolen, tell the Bulgarians to come invade Ukraine to get their gas.


Zwelgje's picture

Gazprom will never get paid by Ukraine. Might as well cut the losses. 

Angry Plant's picture

The idea that you can wage war against a country, and then cut off there gas supply, but at same time think you can then ship gas through that same country to other buyers is a bit crazy.

Of course there ether going to steal your gas are shut it off entirely.

Panafrican Funktron Robot's picture

That is it in a nutshell, the gas that the Ukraine has been obtaining is gas that's not going elsewhere in Europe.  So, Europe can either foot the bill for the Ukraine and import NG from elsewhere, or, ?  

This will really start to heat up toward the latter half of October.  This may also be a tactical move on the part of the US (ie., intentionally restraining intergovernmental liquidity vis a vie the Ukraine), kinda forces the hand of the EU that has thusfar been straddling the fence, or leaning towards Russia (Germany in particular).

Fuck the EU, indeed.

tonyw's picture

Of course russia doesn't want to invade, why on earth would they want to be responsible for a basket case corrupt country.

Like most people they want to peaceably go about their business and try to get on as best they can and want their kids to have a better life.

They don't have bases in dozens of countries all round the world.

They haven't spent billions to overthrow governments democratically elected or otherwise.

They would like to be paid for the gas they have already supplied and not have it stolen again.


Dugald's picture

They's a gonna confiscate the gas taken, fill their tanks and take it back home, makes sense ta me....well don't it??

Limps off muttering.....

kchrisc's picture

More "rackets" and debt from the Rothschilds.

Renewable Life's picture

“Neither the situation nor the Russian position has changed during these days [since the gas cutoff],” Energy Minister Alexander Novak said June 19 in Moscow. “We are waiting for the payment for Russian gas.”

Seems fair enough, but in the "new America world" you don't own that gas Russia, the government of Ukraine does (because they need it) or the Government of America/EU actually!!

So payment for products and all that shit, it's so 20th century capitalism!!
Obama invented a new planetary economic system, you didn't know, it's based on need, and ability to pay! Because no one should be without gas in their stove and heat in their houses! So sit back and shut the fuck up and enjoy the utopian paradise that's to follow!

Oh and if your "ethnic" anything, I don't care really what, just say your ethnic, and you will pay a discounted rate, because of the bad shit that happened to your family, wherever they were, when ever it happened, it doesn't matter, it happened, and you should get a discount!!

It's working perfectly in America, it will work perfectly in Russia too!! Not so perfectly in Iraq and Afganistan, but we are "working on it" over there, this utopian paradise stuff, isn't an exact science, so give us 10-50 more years and we should have it figured out!

Jack Burton's picture

Brilliant post I might add. The new American century does have some very strange ways of defining capitalism. The system of payment for goods or services provided does not pertain in the case of Russian gas, because, as you say, you don't own that gas Mr. Putin. If America claims it for their new friends in Kiev, then it is Kiev's gas. Not only must Russia keep pumping, they must write off Kiev's gas debts and keep the supply flowing at discount prices. Otherwise Russia is using gas as a weapon to intimidate innocent Kiev.

But the most important point in you post is your pointing out that exceptional America is allowed to enforce their will, whatever it may be, not because it is right or just, but simply because the exceptional nation says so.

America is seeking to cut off Russian and European trade as much as possible. Cutting gas exports to the EU is vital to force the EU to buy much more expensive LNG, when and if the US ever invests enough billions to make the system of Atlantic export by ship viable.

Anyways. +100 for a very insightful post!

Paveway IV's picture

Poroshenko: "Huh? What  mean Gazprom won't take EBT card. Swipe card again, please?"

Putin: "No. I tell you ten times now. Russia have no EBT card readers. Cash only. You want or not?"

Poroshenko: "And I tell you ten times this: EBT exact same as cash. Gas is basic human right, Vald. Oh, and maybe add some two carton of Marlboros' to purchase?"

Putin: "Nyet. Please remove from line. Paying customer waiting."

Poroshenko: "I will make my TV station here five minutes to exposing Russian cash-for-gas scam."

Putin: "RT babe already do special for this on the YouTube."

Poroshenko: "Stop to oppressing to me, Russian mafia! Give me the gas!"

Putin: "Oh.... Boots out Yanukovich not so good idea now? Why don't call him and ask kiss-and-make-up?"

Poroshenko: "STOP. Now force us use final option: NATO super-ultimate financial destruction of all Russia."

Putin: "NATO same try to buy smokes and beer on EBT card here last week. Is mental problem with all you?"

Poroshenko: "Say so, Vlad... Who run Bartertown?"

Putin [in microphone]: "Security to checkouts..."

pathetic looser's picture

what about europe and their contracts?


Grande Tetons's picture

July 4th weekend coming up. Prepare to bendover at the pump. 

H. Perowne's picture

Why? The Chairhag tells me that it's just noise, anyway. 

Grande Tetons's picture

July 3rd we will be on the brink of WW3...on Monday the 7th...there will be a picture of Obama hugging Putin on the news.

10mm's picture

Everybody stay home. No bending required. Light a fire cracker and delight in fake Land Of FEE, Home of the Slave shit.

813kml's picture

July 5th NY Times headline:  "Antichrist Putin Invades Ukraine For Refusing To Pass Gas"

Sudden Debt's picture

so.... If the barman tells you... No more beers...
But he keeps pooring them in your glass...
And you keep drinking them....
For free...
Who's the stupid one?

ENTP's picture

No, the bartender has cut Ukraine off, however he is still serving Ukraine's buddies.  Ukraine keeps siphoning off some of his buddy's beer and his buddies are encouraging the behavior.  Eventually the bartender will get fed up and kick them all off the juice.

rwe2late's picture

 Are Ukraine's buddies paying for the juice?

Or are they claiming because they didn't drink it they don't have to pay?

Looks like all drinks will have to be paid up front.

ENTP's picture

There wouldn't be an issue if somebody was paying the bill.  The real day will be when Russia decides it doesnt want fiat as payment.

CrashisOptimistic's picture

Well, there is a context in which that works (and of course, not gold).

It can work like so . . . GAZPROM isn't going to go bankrupt if they flow no oil to south Europe.  They can say, sorry, we're keeping that in the ground for the future and the future is China.

Good luck to you folks finding alternatives (there aren't any).  If you persuade Ukraine to stop stealing, we'll flow.  Not until.

tonyw's picture

"...If you persuade Ukraine to stop stealing,..."

Hmm, maybe they need some troops in there to control them???


ENTP's picture

Print off some more money for Ukraine, we must not let the concept of consequences for not paying your bills creep into Western markets.

Dr. Engali's picture

If somebody was running a gas line through my back yard you can bet your bottom dollar that I would be siphoning some off too. I don't care who you are.

rwe2late's picture

 According to Wikipedia,

Ukraine collects about $3 billion annually in transit fees

for Russian gas transited in the pipelines to EU countries.


If you want to risk collecting those transit fees on the good will

of nations not getting the gas they paid for ...


Basic question, will EU nations subsidize Ukraine gas above the $3 billion transit fees they already pay?

Volkodav's picture

no you wouldn't

idle talkings

HyperinflatmyNutts's picture

Russia in a tight spot here.  They don't want to get pulled into invading Ukraine that would make the US cream their pants but at the same time the SothStream pipeline is a ways off from being completed. In the mean time Ukraine is stealing Russian gas and still has not paid their bill. I think Russia has to just give the separatist all the firepower they need to over throw the the Kiev Junta. 

Postal's picture

Sounds like a complicated chess match. I'm glad our team doesn't have to worry about being outsmarted and embarrassed by the Russians. /sarc

CrashisOptimistic's picture

No, they don't.

Guys here just haven't embraced the concept.


You don't LOSE "sales" if you don't flow.  You postpone them.  The shit is in the ground.  So don't flow it.  Save it for later.

This imagined pressure on Russia talks about "Gazprom is losing $$$ per day by not flowing".  They aren't losing.  They are just not earning as much.  They have other customers up north.  For these, they are just postponing  revenue.  They probably won't even have to fire anyone.

It's the consumers who HAVE to have it right fucking NOW.  The producers will still have it later.

potato's picture

there are high costs with letting pumpjacks idle. corrosion doesn't stop, so you have to keep maintaining the pipes underground and the pipelines with chemicals, anywhere from once a month to twice weekly. trucks and personnel are contracted to maintain oil wells and ship crude from them. if they get no work, they quit.  that is just the beginning the costs calculus. im not saying your idea is bad, but it must also consider the aforementioned costs and more

Volkodav's picture

different subject...gas and pipelines....not oil

Jack Burton's picture

Indeed! Russia must not invade Ukraine, this is Uncle Scams dream scenario! New cold war, massive profits for military industrial complex and reason for severe spying at home. Nope, as you say, the best play by Putin is to go all out to get modern weapons in numbers into East Ukraine. The Self Defense Fighters already have proven to Kiev's stooge soldiers that they are deadly in combat. For now, Russia should keep these highly motivated defenders of their homes supplied with infantry operated guided missiles for anti tank, anti aircraft and hardened ground targets. Kiev's un motivated troops are not interested in real combat, and the Right Sector thugs who do desire to kill, well, they are useless against the hard fighting defenders of East Ukraine. I watched video of 8 captured Right Sector thugs being interviewed on the baattle field littered with their men and machines. Asked why they were there in someone elses home seeking to kill, the best answer the thugs had was the pay they were getting. 3,000 Ukrainian hryvnia a day, others were only getting 2,500. The eight were led away after being told how lucky they were, since they were going to be kept for prisoner exchange.

Poundsand's picture

Disagree.  Russia is simply letting this play out.  Kiev doesn't make their payments, then starts siphoning off gas, refuses to pay for gas, now wants to have the US/EU guarantee it via part ownership as if the US/EU can force delivery.  Good luck with that strategy.

Meanwhile, a cease fire is exactly what I would order if I was supporting the separatists.  Kiev has to keep it's soldiers in the field, supplying them, draining their own reserves.  Think of the cost of the British troops in America vs. the minutemen during the period before and during the revolution.  It wasn't that the Americans defeated the British, we just made staying too expensive, so they left. (Not saying that we never won any battles)  Meanwhile, colder temperatures get closer every day.  Come fall, we will see who's in the tight spot.

HyperinflatmyNutts's picture

Good point of view. I agree the colder weather will favor Russia position

Joe A's picture

They will give them enough firepower to keep the status quo going.

I am a Man I am Forty's picture

They sure use the word "cutoff" loosely.

Gaius Frakkin' Baltar's picture

I don't understand what the problem is here. If the buyers west of Ukraine are getting less than they paid for, shouldn't they be pissed off? If they are still paying Russia the same amount for less, why should Russia care? It only makes Ukraine look worse by the day.

HyperinflatmyNutts's picture

They care because Ukraine is STEALING!!

kowalli's picture

Actually not, Ukraine is stealing from Europe....

dogbreath's picture

I wonder where the law stands on this.   I had the occaision to research bailment law as a part of a theft of my property from storage.   This is a bailment law issue.  

Are there any lawyers here who could comment.   I believe the gas is held in trust  by pipeline gas transit corporation.   I am wondering if the pipe in the Ukraine is owned by separate entities from the same pipeline in russia or poland/Cz.   I am suposing that the shipment is short at the destination of unloading versus the gas that was loaded at the Uke border.   Ownership by posesion??

At some point this is like piracy and the navy has to be sent to deal with it.   The ukranians think they are  Blackbeard 


Crazy Or Not's picture

Makes SHTF look delightful! Anyway you look at this ....its bad!

Am sure Putin keeps away well from tall buildings - this mess will get an IPO all of its own.

ziggy59's picture

Govts hate competition..
Theyre the only ones allowed by self decree to invade, rob, spy, kill...