RIA Novosti: ‘Gas War’ With Russia Impossible Now – Ukrainian FM

Russian Naval Vessel in Ukrainian Port

(RIA Novosti – KIEV, September 25, 2013) ­ Diversification of natural gas supplies by Ukraine and Europe made “gas wars” with Russia impossible, the Ukrainian foreign minister said on Tuesday.

Russia and Ukraine have long fought over natural gas deliveries, jeopardizing supplies to Europe, a major Russian gas buyer.

In the row at the start of 2009, Russia halted all deliveries via Ukraine’s pipeline system for two weeks. In 2007, Gazprom threatened to cut off gas supplies to Ukraine because of an unpaid debt, and cut its shipments to the country by half in March 2008. In 2006, a bitter pricing row between Moscow and Kiev affected gas transits to Europe.

“Situations similar to events of 2007 and 2009 that we call “gas war” won’t happen again today. First off all, the European gas market has changed drastically: in a short period Europe made a huge step towards diversifying its gas supplies. Secondly, Ukraine also was quite successful in reforming its gas market,” Foreign minister Leonid Kozhara said in an interview, published by Forbes.ua.

Kozhara said Ukraine had already signed a contract with Shell to develop shale gas deposits and expects to sign a similar agreement with ExxonMobil.

The country’s shale gas reserves are believed to be some of the largest in Europe, and extracting natural gas from those vast shale rock formations would allow the former Soviet republic to reduce and possibly even end its reliance on Russia for gas.

Ukraine, which has been involved in a dispute with Russia over the terms of its 2009 gas contract in the past years, is now seeking to diversify its gas exports to cut its dependence on Russian natural gas.

In a most recent dispute, Russian gas giant Gazprom presented Ukrainian energy company Naftogaz Ukraina with a $7 billion bill in January, saying the country should pay for the gas it did not use in 2012. Under the 2009 contract, Ukraine must pay for at least 33.3 billion cubic meters of gas on a “take or pay” basis.

Naftogaz spokeswoman Elena Yurieva said shortly after that Ukraine had paid for 24.9 billion cubic meters of gas used last year and considered all its financial obligations to Gazprom met.

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