Friday, January 09, 2009

Gas prob resolved?

It would appear the the Ukrainian-Russian gas spat is edging towards resolution.

It seems to be a "score-draw" result.

Your blogger is not quite so optimistic just yet - Ukrainians have a habit of 'moving the goalposts' at the last minute. There are two distinct matters here - a Russsian/Ukrainian agreement, and supply of gas to other European countries. While the first matter is not resolved the second will be uncertain, monitors or no monitors, meters or no meters.

Several years ago an elderly lady from Lviv told me this story:

She was fed up with high gas bills and went to the gas utility company to complain. They asked her whether she had a gas meter. When she said she hadn't, the man told her, "Get yourself a meter, and the bills should fall dramatically."

She took his advice and had a good meter installed. But the next bill came - and to her horror it was even higher than before. She stormed down to see the man at the gas utility company again.

"You told me to get a meter to reduce my bills. I did exactly as you suggested, but the gas bill is even higher. What's going on here?" she railed.

The man calmed her down, and asked her, "Yes, but what kind of meter did you have fitted?"

"Why, a good one, the best - a German one," she replied."

"Ah, this is no go good," the man said, and paused, adding, "You should have got a Ukrainian meter." [Sounds better in Ukrainian]

p.s. If independent monitors are placed at all the inbound pipes into Ukraine, and also at all the outbound pipes from Ukraine, why have monitors inside Ukraine? Just a thought.


Anonymous said...

According to this interview with the former Russian Deputy Energy Minister, the gas war/cutoff was planned.

And - as we all know - there is no "market-based" pricing with Gazprom. It is used as a political weapon.

Milov: I think that Gazprom's reference to market-level prices is just a sham. It doesn't have any relationship to reality. Over the last year, the differences in prices to former Soviet republics have been colossal. Belarus gets gas for $130; Armenia, for $110; Moldova, for $280; and Ukraine pays $180. There is no way to explain this pricing hierarchy.

This year the prices for different countries are also being established in completely different ways. And it is hard to explain this by tying it to some sort of "market prices." This is all the more true because the only so-called market basis that Gazprom has been referring to in recent years has been the world price of oil, which is now falling sharply. And this means that in a few months, gas in Europe should be being sold for less than $200 [per 1,000 cubic meters].

LEvko said...

Thanks for the link, Elmer - interesting interview. I suspect there may be more cards to be played yet in this gas game between Russia and Ukraine.

Anonymous said...

If you also monitor internal transit points you can ascertain where in transit gas has gone missing.

The other issue that has been misplaced in the question of transit "technical" gas.

Technical Gas is what is required to charge up and keep pressurised the pip lines/ Gas needs pressure in order to flow from pint to point. But once changed technical gas should not accumulate in consumption. So why is Ukraine claiming a daily allowance of gas the equivalent of the total consumption of Austria?

if you had a car tyre that required pumping up every 10KM you would soon ask yourself is the tyre safe.

Ukraine has caused more damage to its own reputation as a "reliable" transit supplier of energy. no doubts Russia will continue to place more resources in the completion of the Northern pipe line to Europe. Once this pipeline is operational Ukraine's ability to hold both Russia and Europe to ransom will be reduced.

Anonymous said...

of course this action has been planned. Gazprom/Russia have been warning Ukraine of this disruption and shutoff over non payment for years.Ukraine has had three years to plan and manage its transition to market prices for gas.

Unlike in 2006 Russia has been advising countries to stick up on gas and like Ukraine have been filling up their gas storage locations in anticipation of Ukraine seeking to cause trouble and disruption to Russia gas supply.

I do not think Ukraine is denying this fact.Its vast gas reserves are testament to this fact.

Anonymous said...

Ukraine should have embraced the offer of $250 per tcm of gas. Much cheaper then $450 and less the what EU customers are paying.Looks like Ukraine is prepared to look a free gas horse in the mouth and then complain about its own breath.