Courtesy of Mish.
Ukraine is now on a pay as you go system for natural gas following a breakdown in negotiations with Russia.
Ukraine is not under immediate threat having enough gas to last until September according to some reports, December in others.
Much depends on how cold, how fast Autumn turns into winter, and also on how much conservation Ukraine can manage in the meantime.
For now, I will accept Gazprom’s estimate of mid-October rather than Ukraine’s estimate of “until December” or earlier reports of “until September”.
Please consider Russia Cuts Gas Supply to Ukraine as Tensions Soar.
Russia halted natural gas deliveries to Ukraine on Monday, spurning Ukraine’s offer to pay some of its multibillion-dollar gas debt and demanding upfront payments for future supplies. Ukraine has enough reserves to last until December, according to the head of its state gas company Naftogaz.
Russia had demanded $1.95 billion by Monday for past-due bills. At talks over the weekend in Kiev, Ukraine was ready to accept a compromise of paying $1 billion now and more later, but Russia rejected the offer, the European Commission said.
Sergei Kupriyanov, spokesman for the Russian gas giant Gazprom, said since Ukraine missed the deadline, from now on it had to pay in advance for energy. Yet that’s a nearly impossible demand for the cash-strapped nation, which is fighting an insurgency and investigating possibly billions lost to corruption under its former pro-Russian president, Viktor Yanukovych.
In 2013, Ukraine imported nearly 26 billion cubic meters of gas from Russia, just over half of its annual consumption.
Kupriyanov said Russian gas supplies for Europe will continue through Ukrainian pipelines as planned and warned Ukraine to make sure they reach European customers.
At a news conference in Moscow, Alexei Miller, the CEO of Gazprom, berated the Ukrainian government, saying it scoffed at compromise and was deliberately turning commercial negotiations into a political discourse.
“Ukraine will get as much gas as it pays for,” Miller said Monday. “The risks to the (gas) transit are there and they’re significant.”…
