Risk of 'gas war' grows as Ukraine halts payments to Russia
Source: Reuters
(Reuters) - Ukraine said on Saturday it was suspending payments to Russia for deliveries of gas, ratcheting up the tension in a standoff that has the potential to leave European Union states cut off from the Russian gas supplies on which they depend.
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A large proportion of the natural gas which EU states buy from Russia is pumped via Ukrainian territory, so if Russia makes good on a threat to cut off Ukraine for non-payment of its bills, customers further west will have supplies disrupted.
Andriy Kobolev, chief executive of Ukraine's state-run energy company Naftogaz, said the increased price Russia was demanding for its gas was unjustified and unacceptable.
"Accordingly, we have suspended payments for the period of the price negotiations," Kobolev was quoted as saying in an interview with Ukraine's Zerkalo Nedely newspaper.
In fact, Ukraine has de facto stopped payments already because it failed to make an instalment of over $500 million (298 million pounds) due earlier this month to Russian state gas giant Gazprom.
Read more: http://uk.reuters.com/article/2014/04/12/uk-ukraine-crisis-idUKBREA3709O20140412
Increased price Russia was demanding for its gas may well be unjustified and unacceptable but Ukraine's debt to Gazprom is for past supplies - c. $2 billion.
Loudly
(2,436 posts)But they're going to be freezing their balalaikas off next Winter.
cosmicone
(11,014 posts)Russia to take Ukraine back. It is a massive economic liability and doesn't really give EU the warm feeling of acquiring for more than a few hours.
I wonder what Ukraine's debt to Russia is secured with -- Russia may start seizing assets to satisfy the debt -- like Eastern half of Ukraine.
Duckhunter935
(16,974 posts)the Ukraine naval ships that were blockaded from leaving port and stormed to remove Ukrainian crews. Also the army and air force assets I am sure worth billions. did they have Crimean national markings or Ukrainian markings, I would think the latter?
dipsydoodle
(42,239 posts)President Vladimir Putin has ordered all weapons and hardware left by the Ukrainian military after Crimeas accession to Russia to be returned to Ukraine.
The Russian President, who is also the commander-in-chief of the military forces, gave the order to Defense Minister Sergey Shoigu at a rank-conferring ceremony in Moscow on Friday. The order concerns weapons, and military hardware including aircraft and ships.
Shoigu reported that Ukrainian units stationed in Crimea who had not wished to come over to the Russian side had left Crimean territory.
The minister added that the flags and symbols on all the ships that remained in Crimea were changed to Russian. We have not allowed any acts of desecration and disrespect towards Ukrainian state emblems, the official added.
http://rt.com/politics/putin-weapons-military-crimea-909/
above is from googling "russia returning ships to ukraine"
Duckhunter935
(16,974 posts)for this is RT and no other media source has carried this. I will believe it when I see it. Forgive me if I do not fully trust the outlet the Putin owns.
You fail to mention that 99% of the links to that search are the taking and storming of Ukraine ships.
From your link......
A source in the Black Sea Fleet HQ told the RIA Novosti news agency that Russia intended to take over about 30 combat ships and support vessels that belonged to the Ukrainian Navy. However, the source added that this would be done only after a thorough inspection of the ships condition. On March 26 all 193 former Ukrainian military bases and institutions in Crimea flew Russian flags.
Yep, steal the best
dipsydoodle
(42,239 posts)I doubt they would fabricate what it seems Putin had said.
I found a note on RIA Novosti too form yesterday : http://en.ria.ru/military_news/20140411/189165021/Russia-Begins-Transfer-of-First-Warship-Back-to-Ukraine--Source.html yes - I am aware that's Russian too but at least a media outfit with a sound record.
I gather from this http://www.kyivpost.com/content/ukraine/ukraine-protests-russias-denunciation-of-black-sea-fleet-agreements-2-343153.html that Russia has withdrawn docking facilities there for Ukraine's fleet.
Duckhunter935
(16,974 posts)I hope they continue. Curious about the 30 ships they want to keep though.
uhnope
(6,419 posts)Except Putin owns RT. At this point, I'm not sure if the GOP owns FOX or vice versa
dipsydoodle
(42,239 posts)btw The Russian State owns RT : not Putin. I still maintain they wouldn't misquote him.
uhnope
(6,419 posts)of having a propaganda agency and strangling the free press if your official statements were misquotes?
Jesus Malverde
(10,274 posts)They are free to have it. Half the business of the military industrial complex is spare parts. Meanwhile NATO will force them to junk it.
dipsydoodle
(42,239 posts)and some of the previous debt may have been so too. That's effectively bullet proof as Greece has already found - forget write downs.
Benton D Struckcheon
(2,347 posts)Basically says that about English law, and that regardless, the EU will do what it has to to make sure they don't default, since they really aren't going to mess with suing the transit country for their nat gas to get them to pay their bonds.
If you can get past the paywall, worth reading. Besides being informative, it's entertaining; John Dizard, the author, is always good for a chuckle.
dipsydoodle
(42,239 posts)Locks me out.
There is a backdoor to FT but I don;t know what it is.
Benton D Struckcheon
(2,347 posts)Below is the heart of the article. (they don't like you to cut & paste, but I figure I'll make an exception for this, just because.) Last sentence is because the article is of course addressed to folks who run emerging markets funds and the opportunity that exists in Ukraine sovereign debt because his contention is that they won't be allowed to default, regardless of the opinion of the bond rating agencies that chances of a default are reasonably high.
Basically saying that while it looks bad, 1. Like you say, it's English law, and no one wants to end up like Argentina, and 2.Ukraine's geopolitical positioning is such that it will never be allowed to happen.
Consider also how interested the Europeans would be in litigating uncertain claims against the transit country for their natural gas. Probably not interested.
This is such a clear life lesson that one would think the sovereign bond speculative community would have nothing to do.
dipsydoodle
(42,239 posts)btw - in a similar fashion that the significance of Argentina's bonds being written under New York law.
I'm not sure what the position is with regards gas destined for Europe from the storage tanks in Ukraine i.e when title passes from Gazprom. Only reference I've seen with regard the storage tanks is that they were one of the reasons the EU wanted Ukraine to sign - summer use by the EU when gas prices are lower.
Benton D Struckcheon
(2,347 posts)L0oniX
(31,493 posts)dipsydoodle
(42,239 posts)Would require at least 400 tankers and literally millions of Atlantic crossings. That's aside from the US have the capacity to produce that much LPG.
And by the way - in a year a single super tanker emits the equivalent of 50 million cars.