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Naftogaz CEO: Ukraine will survive winter
Journal Staff Report

KIEV, Nov. 24 - Ukraine will survive the winter even if Russia completely shuts down its natural gas supplies amid escalating tensions over energy, Andriy Kobolev, the head of the national Naftogaz Ukrayiny, said.

Kobolev responded to questions about potential retaliation from Russia days after Ukraine had suspended supplies of power to Crimea, a Ukrainian peninsula annexed by Russia in March 2014.

Crimea declared a state of emergency Sunday after four main power transmission lines from Ukraine had been blown up, leaving the peninsula without 80% of power supplies.

“Today, unfortunately I have received many questions from absolutely different people on ‘What is going to happen if Russia suspends gas supplies to us?” Kobolev wrote on his Facebook page late Monday.

“Here is my response: We will be able to meet Ukraine’s gas demands with European supplies this winter and every one and each next winter,” Kobolev said. “Diversification and gas markets really work.”

The comments suggest Ukraine has considered and prepared for the most serious scenario of escalated tensions with Russia similar to those in January 2006 and January 2009 when Russia had completely disrupted gas supplies to Ukraine.

The fears of potential retaliation by Russia were raised after Russian Energy Minister Aleksandr Novak on Monday said Russia will soon consider ways of responding to the Crimea power supply disruptions.

Alexei Miller, the CEO of Gazprom, said Monday that Russian gas supplies to Ukraine may last for two more days and will be then suspended because Ukraine had not made a prepayment for more supplies.

The developments come after Ukrainian Energy and Coal Industry Minister Volodymyr Demchyshyn said Monday that Ukraine does not plan to import any more Russian gas this year.

He said Ukraine’s gas stocks in underground gas storage facilities are sufficient and domestic demand was weaken than previously expected.

However, Ukraine will continue to import European gas supplies via Slovakia, Demchyshyn said.

Ukraine had 16.52 billion cubic meters of gas in its underground gas storage facilities as of November 22, down 1.86% from November 15, according to Naftogaz Ukrayiny, the national energy company.

Ukraine is expected to have at least 16 Bcm of gas in the storage facilities as of the end of November, Demchyshyn said.

Ukraine paid $227/1,000 cubic meters of Russian gas in October and November, but said the price will probably drop to below $209/1,000 cu m within months.

Ukraine and Russia need to reach an agreement on gas prices by December 20 in order for Ukraine to be able to import Russian gas in January 2016, Demchyshyn said. (nr/ez)




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