Ukraine's long natural gas row rolls onto U.S. shores

For the last half-decade, one of the biggest -- and most menacing -- tales in energy has involved the shady natural gas business in Ukraine. The story has included three consecutive years of dead-of-winter heat cutoffs to major parts of Europe, Russian political bullies poised to pounce on the continent, and billions of dollars in alleged underhanded dealings. In sideshows, the West and Russia have unveiled dueling, multi-billion-dollar natural gas pipelines, and in December rowdy Ukrainian politicians erupted into a free for all in parliament. Now, the spectacle has spilled out into U.S. courts.

This latest episode in the saga centers on Rosukrenergo, a Swiss-based middleman company that earns billions of dollars by arranging for the shipment of natural gas from Turkmenistan and Russia through Ukraine and on to Europe. Granted, it's no simple matter to move raw materials of any type across former Soviet borders, as any trader will tell you. But this company has been the source of much mystery because of its scale of fees. Some people have wondered why Gazprom, for example, the mighty, muscular Russian natural gas giant, has been willing to share fees with this comparatively no-name company with no visible sign of geopolitical leverage.

A week ago, Yulia Timoshenko, Ukraine's former prime minister (pictured above), filed suit in U.S. federal court in New York against Dimitry Firtash, a Ukrainian billionaire who controls Rosurkenergo, and is allied with her blood enemy, Ukraine President Viktor Yanukovich. In a nutshell, she alleges that the Ukrainian government threw -- that is, deliberately lost -- a natural gas arbitration dispute in Stockholm that, as a result, netted Firtash, the plaintiff in the case, hundreds of millions of dollars in natural gas belonging to the Ukrainian state. An unspecified portion of these winnings, the suit alleges, went as a kickback either in cash or kind to finance the Yanukovich government's political and financial dealings.

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The suit is part of an uptick of a trend in which the politics of dysfunctional governments around the world are playing out in the courtrooms of western capitals, most prominently those of the United States and the United Kingdom.

http://oilandglory.foreignpolicy.com/posts/2011/05/05/ukraines_long_natural_gas_row_rolls_onto_us_shores