Gazprom

Previous Updates

16 January 2009

Naftogaz Ukrainy rejects its own proposal for gas transit to Europe

Naftogaz Ukrainy rejects its own proposal for gas transit to Europe

Yesterday Gazprom received from the Unified Dispatcher Department (ODU) of Naftogaz Ukrainy a proposal to supply through GIS Sudzha for transit via Ukrainian territory to Europe 99.2 million cubic meters of gas per day. The Ukrainian side proposed the following daily distribution of the gas volume at the exit from the Ukrainian gas transportation system: GIS Orlovka - 28 million cubic meters, GIS Uzhorod - 57.3 million cubic meters, and 13.9 million cubic meters for Moldovan customers.

Gazprom accepted the ODU proposal and forwarded today at 02:00 hours an application for the transit of Russian gas to Europe through the territory of Ukraine.

However, Naftogaz Ukrainy rejected its own proposal, which it submitted several hours before. The pretext was as usual - the absence of a technical agreement on the terms of supply-acceptance of gas at border GIS for 2009. Provided Ukrainian goodwill, the absence of the technical agreement comprises no obstacle for the resumption of the gas transit to Europe.

At the same time Russian observers were barred from the earlier agreed monitoring points - Ukrainian underground gas storages and ODU. Thus, the Ukrainian side continues to rudely violate the acting transit protocol and the terms of reference signed on January 12 in Brussels by the European Commission, Russia and Ukraine. It has again demonstrated to the whole world that the main obstacle impeding the resumption of Russian gas transit to Europe is the absence of a political decision in Ukraine rather than technical problems.

In conditions when European customers continue to remain without gas at the fault of Ukraine, which blocked the transit, such inconsistent actions of the Ukrainian side are outrageous.

In this connection Gazprom once again calls on Naftogaz Ukrainy to stop looking for excuses to its own unwillingness to resume the transit to Europe and to finally open the taps on its territory and intake the Russian gas into the Ukrainian transportation system for transit to European customers.

On the Russian side taps have been open for the fourth day running at GIS Sudzha towards Ukrainian gas transportation system, the pressure is operational and allows to start pumping gas to European customers at any minute.

15 January 2009

Innovative Solution to Allow Gas Transit to Resume

Innovative Solution to Allow Gas Transit to Resume

In a scheduled meeting in Moscow today Gazprom CEO Mr Miller, Prime Minister Mr Putin and Eni CEO Mr Scaroni, the Russian side proposed an innovative solution to end the current gas transit crisis.

The proposal calls for major European energy firms to form a consortium of gas importers that would buy the technical gas from OAO Gazprom needed to deliver natural gas via Ukraine to European customers.
In a telephone call earlier today with Ukraine's President Yuschenko, Russian President Dmitry Medvedev had proposed an innovative solution to enable Gazprom to resume transiting supplies of gas to European customers via Ukraine. The proposal was then discussed today in a telephone conversation between Prime Minister Putin and Italian Prime Minister Berlusconi.
Mr Putin said that from Gazprom's side the flow of gas was open, but despite all of its efforts, and all of the requests from European partners Ukraine had continued to refuse Gazprom's daily requests to transit gas to Europe.
Ukraine had said it was technically incapable of allowing Russian gas to reach Europe unless it received 1.7bcm of gas for technical purposes, partly to refill the pipeline system and partly to fuel the compressor stations along its network. Whilst Mr Putin called the request for Gazprom to transfer ownership of this significant and expensive amount of gas to Ukraine absurd, he said that Russia had to help Ukraine.
Whilst Russia was not able to take all the financial risks of providing this large volume of gas alone, it was proposing to major European partners and customers that they join together to form a consortium which would share the cost and ownership of the technical gas, which would be supplied to Ukraine to enable the resumption of supplies to Europe.
Ukraine would promise to pay for this gas once a price had been agreed upon. Until then, the gas would remain the property of the international consortium in the hope that this would guarantee that it would not be illegally taken out of the Ukrainian transit system again. It is hoped that this solution would prevent any further disruption of supplies of Russian gas to Europe.
Mr Scaroni called the proposal innovative and constructive, and underlined that this was a commercial rather than a political solution.
All other European companies who purchase Russian gas delivered via Ukraine, such as E.on Ruhrgas, will be invited to join such a consortium in the coming hours. Such a consortium could be put together very rapidly.
This initiative is the latest in a series of attempts by Gazprom to do whatever it can to make sure that European customers are receiving their gas.

15 January 2009

Ukraine acknowledged that there is a technical possibility to accept Russian gas via GIS Sudzha, but there is no political decision to do so

“As you know, after the signing of the terms of reference for the monitoring of the transit of natural gas through Ukraine, and after observers from the European Commission and Gazprom took their positions at stations at the entrances and exits of Ukraine’s gas transportation system, Gazprom began implementing the plan to restore the transit of gas through Ukrainian territory. In order to do that, we submitted a request to NAK Naftogaz Ukrainy to supply gas through GIS Sudzha to Orlovka. After that we filed an application for delivery of gas in the direction of Uzhgorod. However, as of this moment, for more than two days our Ukrainian colleagues have not accepted our applications and have not accepted gas into their gas transportation system. The valves are open and operating pressure exists on the Russian side, but the gas is not flowing because the valves on the Ukrainian side are still closed.

Today we received a letter from Naftogaz Ukrainy, which indicated that there is a technical possibility to open Sudzhu and begin the transit of gas to European consumers. Moreover, without any additional conditions, without any additional requirements in relations to gas for technological needs, in relation to gas needed to fill the system.

According to the document Naftogaz Ukrainy is ready to take 99.2 million cubic meters per day through GIS Sudzha, and divide these volumes partly for Moldova (13.9 mcm), partly to Orlovka (28 mcm) and partly in other direction, in particular, to Uzhhorod (57.3 mcm).

This means that, in fact, there was a technical possibility to receive Russian gas into the Ukrainian system this entire time. There is no political decision to reopen the transit of Russian gas to Europe through Ukraine. And, despite receiving information from the dispatcher today that it is possible to take gas into the system, Naftogaz Ukrainy Chief Oleg Dubina in a telephone conversation today stated that they will not do so,” said Gazprom spokesman Sergey Kupriyanov .

15 January 2009

Royal Dutch Shell CEO: Russia is ready to supply gas through Ukraine

Royal Dutch Shell CEO: Russia is ready to supply gas through Ukraine

Gazprom CEO Alexei Miller held a working meeting today in company's headquarters with Royal Dutch Shell CEO Jeroen van der Veer.

They discussed bilateral cooperation issues in the framework of existing agreements and prospects of expanded cooperation in gas production and liquefaction, including the possibility of joint field development in third countries.

Specific attention was paid to the critical situation that emerged on the European energy market because of the Ukrainian refusal to transit Russian gas to Europe.

Alexei Miller informed Van der Veer on measures taken by Gazprom to resume the transit via Ukraine as soon as possible. It was stressed that an unprecedented situation has developed that demands design mechanisms that would prevent a blockade by transit states in future.

After the meeting Jeroen van der Veer visited the Central Dispatcher Department where he could see for himself on the electronic gas transportation map that Ukraine had blocked the transit of Russian gas to Europe.

"It was very interesting to see the center that controls Gazprom's gas flows. It is clear that the Russian side is ready to supply gas. We all have seen it and I've seen it myself," he said.

Background:

Royal Dutch Shell is the British-Dutch Oil and Gas Company and is engaged in over 110 countries (39 for exploration and production) including the USA, Kazakhstan, Nigeria, Brazil, Malaysia, Ireland, Russia, and Canada.

Shell holds 27.5% in Sakhalin Energy Company, the operator of the world’s largest complex oil and gas project Sakhalin-2. Participating in the project are also Gazprom (50% of stock plus one share) and Japanese Mitsui (12.5%) and Mitsubishi (10%). Licenses reserved of Sakhalin-2 comprise close to 4 billion barrels of oil equivalent.

15 January 2009

Ukraine again refuses to transit Russian gas to Europe

Ukraine again today refused to transit Russian gas to Europe through its export pipelines. Gazprom had requested that Naftogaz Ukrainy accept 99.2 mcm for export to Moldova, the Balkans and Slovakia, but Ukraine has now declined on the grounds that there was not a technical agreement in place for gas transit throughout 2009. However, given that there is a valid transit contract in place covering 2003-2013, and given that in 2007 Ukraine was able to transit gas without any technical agreement, Gazprom does not believe this is a valid reason for Ukraine to refuse to transmit gas. Gazprom is currently informing Naftogaz Ukrainy on a daily basis of the volumes it wishes to transit.

Gazprom's statement follows:

Ukraine again refuses to transit Russian gas to Europe

Today at 02:00 hours another application was forwarded to the Unified Dispatch Department of Naftogaz Ukrainy for the transit of 99.2 million cubic meters per day from 10:00 hours through GIS Sudzha. 13.9 million cubic meters are intended for Moldovan consumers, 63.1 million through GIS Orlovka for the Balkans, and 22.2 million cubic meters through GIS Uzhorod for Slovak consumers.

In response we again received a refusal to transit gas under the pretext of an absence of a technical agreement on the terms of gas supply-acceptance at bordering GIS for 2009. The absence of the technical agreement does not provide grounds for the cessation of the transit through the Ukrainian territory, as there is an acting transit contract for 2003-2013.

Usually, technical agreements between Gazprom and Naftogaz Ukrainy were signed at the end of the year, while in 2007 there was no technical agreement altogether, which did not impede either the transit of gas to Europe or its supplies to Ukrainian consumers. In the current crisis situation the absence of that or another optional technical document, which is not a part of the contract, cannot serve as the grounds for the refusal to transit gas.

In this connection Gazprom demands Naftogaz Ukrainy to immediately fulfill its contract obligations and intake the Russian gas into the Ukrainian transportation system for transit to European consumers. The tap on the export trunk line on the Ukrainian territory after GIS Sudzha is still closed.

On the Russian side taps have been open for the third day running at the entrance to the Ukrainian territory at GIS Sudzha, which allows to provide for gas supplies to European consumers at any minute.

14 January 2009

The prime ministers of Bulgaria, Slovakia and Moldova saw for themselves that Ukraine blocks Russian gas transit to Europe

The prime ministers of Bulgaria, Slovakia and Moldova saw for themselves that Ukraine blocks Russian gas transit to Europe

Today Gazprom CEO Alexei Miller held a working meeting in the company's headquarters with Prime Minster of Bulgaria Sergei Stanishev, Prime Minster of Slovakia Robert Fico and Prime Minister of Moldova Zinaida Greceanii.

Participants in the meeting discussed the critical situation, which developed because of the Ukrainian refusal to transit Russian gas to Europe.

They visited the Central Dispatch Department where Alexei Miller demonstrated on the dispatching screen to Sergei Stanishev, Robert Fico and Zinaida Greceanii the real situation with the gas transit through Ukraine.

The meeting in the Central Dispatch Department was held with the participation of monitors and members of the commission for the monitoring of gas transit through the territory of Ukraine.

"We began to pump gas yesterday morning towards the Balkans, which are experiencing the most acute fuel shortage. However Ukraine did not take in the gas and continues to block our gas from its transportation system. The Ukrainian side has not given any comprehensible explanations of their refusals to our demands that they open the Western taps. As you can see on the dispatch screen the gas transportation system is open on our side, is maintaining operating pressure and is ready to begin pumping gas to Europe at any minute through GIS Sundzha. However zero volumes of gas are going to Ukraine, as the gas still encounters the closed Ukrainian tap.

Today, during our meeting we discussed possible steps to resolve the crisis. In particular, the Slovak prime minister proposed a major swap transaction.

It means Gazprom would supply gas to Ukraine for its internal needs in the amount of 20 million cubic meters per day, which is the amount necessary for Slovakia, while Ukraine, which has its underground storages located at the border with Slovakia, would supply the same amount of gas to Slovak consumers.

Gazprom agrees to such a swap. Ukraine has to open the tap on its territory for that. Now it’s up to Ukraine.

We have also agreed to consider how to implement a similar scheme for Moldova.

Unfortunately, it is impossible to make swap transactions with Bulgaria, as Ukraine has no underground gas storages in that direction," Alexei Miller said.

At the end of the meeting the parties agreed that the current crisis with gas transit via Ukraine must end immediately and there are no objective reasons to delay the re-start of transit.

Sergei Stanishev, Robert Fico and Zinaida Greceanii stressed the necessity to diversify the supply routes for Russian gas to Europe to avoid transit risks, and thus the construction of direct pipelines, such as South Stream the Black Sea bed, becomes specifically important.

14 January 2009

Ukraine not transiting Russian gas to Europe

Gazprom attempted again today to transit gas to the Balkans, Moldova and Slovakia through the Sudzha pumping station, which provides the most direct route to those customers, but Naftogaz Ukrainy wanted gas to go to other pumping stations which mostly serve domestic Ukrainian pipelines.

Ukraine also wanted Gazprom to pump in an extra 140 mcm of gas into the system to repressurize it – this is to replace the gas which was sitting in the pipelines when Gazprom ceased to be able to supply its European customers, and is now unaccountably missing, indicating those volumes have been illegally siphoned out of the system.

Gazprom’s statement follows:

Ukraine not transiting Russian gas to Europe

Today at 02:00 hours Gazprom submitted to the Unified Dispatcher Department (ODU) of Naftogaz Ukrainy another application for the transit of 98.8 million cubic meters of gas per day beginning from 10:00 hours through GIS Sudzha pumping station. 13.9 million cubic meters of the amount are intended for Moldovan consumers, 62.7 million cubic meters for the Balkans via GIS Orlovka, and 22.2 million cubic meters through GIS Uzhorod for Slovak consumers.

In response, shift leader at the ODU Alexander Sidorenko refused to take in Russian gas through GIS Sudzha. The beginning of the transit was again conditional on gas supplies being sent through GIS Pisarevka and Valuiki, which are mostly designated for domestic consumption in Ukraine, as well as on the restoration of gas reserves in the transit trunk lines of Naftogaz Ukrainy in the amount of 140 million cubic meters.

The systematic lame excuses of Naftogaz Ukrainy confirm that Ukraine is incapable of compensating for the Russian gas it unlawfully siphoned off and to resume the transit.

On the Russian side taps have been opened at GIS Sudzha towards Ukrainian gas transportation system, the pressure is operational and Gazprom is ready to supply gas to European consumers at any moment.

14 January 2009

Reports of foreign monitors confirm Ukraine has blocked transit of Russian gas

Reports of foreign monitors confirm Ukraine has blocked transit of Russian gas

Monitors of the international commission in Kiev Julius Skac (SPP a.s.), Sergei Bazaleyev (Gazprom export), Peter Jachorski (Estrim), Alain Rossiniol (Gaz de France Suez), Roberto Merlo (ЕU), signed an hourly report for gas pumping stations (form №1), which testifies there is no pumping of Russian gas along Ukrainian transit gas pipelines towards Europe, while at the Sudja station in Kursk region monitors registered a 70-atmosphere pressure at the entrance to the gas transportation system of Ukraine.

Similar hourly report (form №1А), which also confirms the absence of any pumping of gas in the western direction, was signed by observers from the monitoring commission Johan Haumer (OMV) and Oleg Antonov (Gazprom export ) at Uzhgorod station.

13 January 2009

Naftogaz Ukrainy Refused to Transit Gas to Slovakia

“Today, we received another refusal from Naftogaz Ukraine to our request to take in Russian gas into its system, this time through the Uzhhorod corridor.

Naftogaz Ukrainy refused our request to transit through the GIS Sudzha - GIS Uzhhorod route 22.2 million cubic meters of gas per day to Slovakia, where the situation with gas supplies is particularly difficult. Naftogaz’ argument was the same as for blocking flows through the Balkan corridor: the requirement for some “long-term transit guarantees.”

What more long-term guarantees can be discussed if we already have a transit contract until 2013 and a document on “Terms of Reference ...” signed by all parties?! It’s already obvious to the whole world that the Ukrainian side must move from excuses to concrete actions,” said Gazprom Deputy CEO Alexander Medvedev.

13 January 2009

Gazprom Deputy CEO Alexander Medvedev and Gazprom Spokesman Sergey Kupriyanov at press conference in Moscow

Gazprom Deputy CEO Alexander Medvedev and Gazprom Spokesman Sergey Kupriyanov today spoke to journalists in Moscow:

Gazprom has informed its European clients that it had declared force majeure on its European gas exports through Ukraine. "Today we sent our partners an announcement on force majeure," Alexander Medvedev said.
"We hope the conflict over Russian gas transit via Ukraine will be solved as soon as possible, and then we will be able to increase the volumes of gas deliveries to make up for under-deliveries," Alexander Medvedev said.
Alexander Medvedev said that Gazprom and its European partners will demand reimbursement from Ukraine for the halt in gas transit. "We will use the entire legal arsenal. Not only will we demand payment of damages, but many consumer countries will do that," he said.
"Everyone sighed with relief yesterday, hoping that transit will begin. It was no accident that we started to send supplies for export through Sudzha. This is an export-oriented pipeline and has direct access to Bulgaria, Romania, Macedonia, and Turkey. Furthermore, we also expected to use the same route to send gas to Slovakia. Sudzha was the last pipeline through which we could still supply gas to Europe."
"The Valuika and Pisarevka [gas measuring stations] are not export points, but they service Ukraine's domestic consumers. We have no intention to supply gas to Ukraine as no contract has been signed," said Alexander Medvedev, referring to the two stations proposed by the Ukrainian side.
"We are faced with blocked export routes for Russian gas to Europe," Alexander Medvedev said.
Gazprom has asked Ukraine to ship 76.6 million cubic meters to the Balkans and 22.2 million cubic meters to Slovakia tomorrow through Sudzha to Orlovka. However, Gazprom has not received a response from Ukraine.
As a gesture of good will, Gazprom allowed EU monitors to Gazprom's central dispatch office. "Thus, the European experts will be able to obtain the same information as the management of Gazprom and personally observe the scene. This was done beyond the conditions of the agreement, as a gesture of good will."
Gazprom has received a letter from the dispatch control of the TCU of Ukraine, in which it notified Gazprom that as of 1 January 2009 the Ukrainian system is working in an autonomous regime. "They were acting according to a plan. As the New Year came, the whole system was shifted to domestic consumption," Alexander Medvedev said.
Sergey Kupriyanov said that Gazprom has received a letter from Naftogaz Ukrainy saying that in order to ensure transit to Europe, Gazprom must provide 140 million cubic meters. "It's written just like that: "to make up for transit volumes in the pipelines." That is, explicitly recognizing that they do not have that gas, and that is the only reason they are unable to ensure gas transit to our European customers."
"It is often said that 36 hours is necessary for our gas to reach our European consumer. This could mean only one thing - our Russian gas, which was held in transit pipelines in Ukraine, has been stolen. This amount does not exist and our Ukrainian colleagues have openly spoken about this."
"In reality, if the system is pressurized and the gas is there, as soon as we begin to deliver gas at the eastern border, the same volume should be immediately seen by out customers on the western border," Sergey Kupriyanov said.
"What is happening now at the entrance to the Ukrainian TCU confirms that Ukrainian statements that they could not cut anything, that they do not have such technological capabilities, will not hold up to any criticism. This is exactly what's happening at the moment," Sergey Kupriyanov said.
Alexander Medvedev said that Gazprom received a letter from the Ukrainian side saying that in order to restructure Ukraine's gas transportation system towards exports it was necessary to agree on the technical conditions for the transfer of gas and receive guarantees that gas will be transited for a long time. He noted that it was difficult to understand the requirements of the Ukrainian side, because there is a long-term contract to supply gas to all transit lines.
Alexander Medvedev said that Ukraine has also requested that Gazprom supply 76.6 million cubic meters for domestic consumption. "These are the preconditions to restart the transit of gas, 140 million cubic meters here, 76 million cubic meters there and some kind of guarantees," Alexander Medvedev said.
Alexander Medvedev said that Gazprom does not yet have information on the full amount of illegally siphoned off gas on the territory of Ukraine. Sergey Kupriyanov clarified, "We don't know yet how much was taken. That will be known after the work of monitors. And that will be possible when gas starts to flow."
Sergey Kupriyanov said that Ukraine has already taken 140 million cubic meters just from the Balkan-oriented route. "We do not have information on what is happening in the other parts of the transportation system."
Negotiations for 2009 gas supplies are not currently taking place despite Gazprom's readiness to do so.
Sergey Kupriyanov recalled that Ukraine's debt before 1 January 2009 stood at $615 million, and it will grow based on how much was illegally taken. Additional fines and fees on that amount have also been incurred since 1 January 2009.
Sergey Kupriyanov said that the transit state must provide its own technical gas pursuant to the existing contract between Gazprom and Naftogaz Ukrainy.