Russian Prime Minister Vladimir Putin warned that there would be "serious consequences" for Ukraine if the country were to intercept gas supplies destined for the rest of Europe.
Gazprom Prepares To Leave Ukraine Shivering
Melinda Peer
With negotiations between Russian energy company Gazprom and Ukraine at an impasse just a few hours before the firm's midnight deadline, it looks increasingly likely that Kiev residents will start 2009 without supplies of gas. Gazprom engineers are prepared to make good on a threat to shut down the gas pipelines in the absence of an agreement.
After Gazprom reiterated on Wednesday that failure to resolve the dispute over Kiev's $2.0 billion gas-supply-related debt would result in a cutoff, the company said. Without a new gas supply contract, Gazprom said it "won't have any legal grounds to supply gas beyond the customs territory of the Russian Federation to Ukraine." Shares of Gazprom trading on the pink sheets gained 10 cents, or 0.7%, to $14.40, during New York's afternoon trading session.
"The talks with Ukraine haven't brought any concrete result," said Alexey Miller, chairman of Gazprom's management committee. "We are seeing now during the talks that the gas issue has ceased to be an economic one, but is a political bargaining chip for Ukraine," he added, as concerns spread regarding the availability of gas supplies for European states that get gas from pipelines that transit through Ukraine.
Russian Prime Minister Vladimir Putin warned that there would be "serious consequences" for Ukraine if the country were to intercept gas supplies destined for the rest of Europe. Previously, Ukraine had said Europe's supply would be unaffected by the dispute.
The two sides have been engaged in negotiations regarding Kiev's $2.0 billion debt ahead of Wednesday's deadline but had made little headway as of late Tuesday. (See "Gazprom Feels The Pinch.") According to TradeTheNews.com, by early Wednesday, both sides appeared to be set on resolving the dispute by means of political intervention from Moscow, but little progress was achieved Wednesday, as the players argued over supply pricing for the coming year. Gazprom raised the country's prices by 40.0%, but they are still cheaper than those Western Europe is paying.
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