Alert sounded over possible Russia-Ukraine 'gas war' disruption

30 October 2013 15:43  [Source: ICIS news]

LONDON (ICIS)--Chemical and fertilizer companies throughout much of central and eastern Europe should be on alert for gas supply disruptions this winter with Russia and Ukraine having moved to the verge of a new “gas war”, a bank said on Wednesday.

Russia has warned Ukraine that there could be problems with continuing to send gas along the Druzhba (Brotherhood) pipeline unless Ukrainian national energy company Naftogaz Ukrayiny pays Russian gas export monopoly Gazprom an $882m gas debt overdue since 1 October, noted Austria-based Erste Group Bank.

Russian prime minister Dmitri Medvedev - whose officials have been trying to persuade Ukraine that it could receive cheaper gas if it joins a Russia-led customs union rather than going ahead with the signing of a trade and political agreement with the EU in November - described the gas debt situation as “absolutely critical”.

If Russia halts gas flows along the Druzhba pipeline, gas supplies will not reach countries including the Czech Republic, Slovakia, Hungary, Austria and Romania, said Tamas Pletser, an Erste analyst.

Poland was in a better position as it received Russian gas through the Yamal pipeline that traverses Belarus, while Germany has a direct link to Russian gas export terminals via the undersea Nord Stream pipeline, he added.

The past decade has several times seen winter gas debt disputes break out between Russia and Ukraine, with Russia going so far as to cut off supplies through Druzhba pipeline in both 2006 and 2009.

By: Will Conroy
+44 20 8652 3214

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