Curtain raiser: Ukraine to vote on Russian sanctions

12 August 2014 10:09 Source:ICIS

The Ukrainian parliament is due to decide on Tuesday whether to approve a draft law which will put in place sanctions against Russia, including the possibility of halting the transit of natural gas through Ukraine to Europe.

The bill includes a list of 172 citizens of Russia and 65 legal entities, mainly in Russian ownership, that “support and finance terrorism and are directly related to crimes committed in the territory of Ukraine,” according to a government statement last Friday.

The statement did not mention natural gas specifically, but oil and gas incumbent Naftogaz’s CEO Andriy Kobolyev said on Tuesday it was possible the sanctions would include Russian gas supplier Gazprom, meaning the transit of gas through the country could be affected.

“Our understanding of the intent of the cabinet ministers is the ban could be imposed only on certain companies. Any European company could have contact with (grid operator) Ukrtransgaz and transit gas through Ukraine,” Kobolyev said in an interview with Bloomberg on Tuesday morning.

Kobolyev said this would mean European companies could buy Russian gas directly at the Russian border with Ukraine, and then transit the gas themselves through Ukraine. He said he did not believe this would drive the prices that European companies paid for gas higher. Miriam Siers

By Miriam Siers