The Russia-Ukraine gas supply dilemma could see a new development as the countries continue political and commercial retaliation, Kallanish Energy learns.
Russian Energy Minister Alexander Novak said Monday Gazprom will end gas deliveries to Ukraine’s state-owned gas company, Naftogaz, as Kiev had not prepaid for more gas.
The prepaid supply, agreed to through European Union (EU)-brokered negotiations, may end this week, but with Ukraine reporting “minimum consumption,” its underground stockpiles are expected to be sufficient to cover its needs through the end of the year.
Ukraine’s energy minister, Volodymyr Demchyshyn, said Ukrainian gas consumption has been less than expected, “therefore there is no critical need now to make any kind of prepayment.”
He added “fuel prices should fall further in the first quarter of 2016, when a new supply deal with Russia is expected.”
Meanwhile, tensions rose after an unknown saboteur blew up electricity pylons supplying power to Russia-annexed Crimea, causing a blackout over the weekend.
Novak complained Ukrainian authorities weren’t allowing power restoration to Crimea “out of some kind of political motivation,” and said there are “different options” on how Moscow could retaliate.
“Russia delivers coal to the Ukrainian energy sector. We could, and maybe in this situation we need to, make a decision about halting deliveries of coal by our commercial organizations which deliver to Ukrainian power stations,” he said.
