October 10, 2007
Ukraine pays off Gazprom
Ukraine’s deal to settle its dispute with Gazprom over debts owed by its gas companies Rosukrenergo and Ukrgazenergo does not look great from Ukraine’s point of view.
The debts - which have mysteriously risen from $1.3bn to over $2bn - are to be paid off mainly in gas held in storage in Ukraine. Those comforting gas reserves were one reason why the threat to cut back supplies to Ukraine did not seem so frightening. Now those reserves will be lower.
The EU is still looking pretty comfortable: only in Italy is the danger of supply disruption creating genuine nervousness. That could make Ukraine look even more isolated if tensions flare up again.
It might have been better to have the fight now, than in the middle of winter.
UPDATE That dispute gave added edge to the energy security conference now on on Vilnius. Five countries - Ukraine, Poland, Azerbaijan, Georgia and Lithuania - agreed to form a consortium to advance their plan for an extension of Ukraine’s Odessa-Brody pipeline into Poland. (The Azeri take here, in slightly skewed but comprehensible English.) Ukraine’s president Viktor Yushchenko hailed what he called a "historic" agreement.
