Tag Archives: Europe

Russian sanctions bill could spur gas transit independence

Business — by Evan OstryzniukA law to punish Russia for its annexation of Crimea and military aggression in eastern Ukraine could force European gas consumers to conclude transit contracts with Ukrainian counter-parties to use the nation's vast pipeline system of 38,600 kilometers. © AFPA law to punish Russia for its annexation of Crimea and military aggression in eastern Ukraine could force European gas consumers to conclude transit contracts with Ukrainian counter-parties to use the nation’s vast pipeline system of 38,600 kilometers. © AFP

When European Union member states, Turkey and Moldova buy natural gas from Russia, they contract with the Russia party at Ukraine’s western border, thereby obviating the need for a Ukrainian counterparty. But soon, Western gas consumers might have to deal with the Ukrainian side.

Changes to the rules of gas transit might enter through the backdoor should Ukraine’s parliament pass a law on sanctions against Russia on Aug. 12, which would oblige European buyers to deal with Ukrainian companies instead of Russia’s Gazprom.

Russia’s state-owned gas behemoth has a separate agreement with the Ukrainian gas transit company, the state-owned Ukrtransgaz. Kyiv receives around $3 per 1,000 cubic meters per 100 kilometers, depending on a formula that is based on the price of gas itself.

In 2013, Ukraine transited 86 billion cubic meters (bcm) of gas to Europe for almost $3 billion, according to Gazprom. Europe receives a third of its gas from Russia, half of which passed through Ukraine.

The measure is part of the proposed law on sanctions to be imposed on 72 individuals and 65 legal entities – mostly Russian – for supporting and financing terrorism in Ukraine. It forbids Russian gas transit services via Ukraine, according to an Aug. 11 statement by state gas giant Naftogaz Ukrainy. To compensate, the company is proposing that all European and Turkish counter-parties dealing with the Russian gas company Gazprom, which would be sanctioned, to sign transit deals with Ukrtransgaz in order to maintain a constant flow.

While Russia turned off the taps to Ukraine on June 16, it continued to supply gas to Europe via Ukraine’s vast pipeline system. “Naftogaz confirms its readiness to provide the same flawless transportation of natural gas to European consumers,” said Naftogaz Chairman Andriy Kobolyev.

The transfer of right to transit from Russia to Ukraine can be seen as a way of getting gas system reforms in through the backdoor. Since June, the government of Prime Minister Arseniy Yatseniuk has wanted to split up the gas system so that it would conform to the EU’s Third Energy Package, whereby the gas transit component would become “unbundled” and an independently-run entity. Then, the Europeans would have no reason not to use Ukraine’s system.

According to Andriy Chubyk, energy analyst for the Centre for Global Studies Strategy XXI, “Ukraine is obliged within Energy Community membership to enact full-scale reform of Ukrtransgaz, including real obligations and rights to operate under EU energy law.”

The law to sanction Russia might also be the push Ukraine and Europe need to get the reforms moving, former presidential advisor on energy issues Bohdan Sokolobsky told the Kyiv Post. “This would force discussion on rebuilding the gas transit system,” he said.

Ukraine’s strategic gas transit system is worth $25-$35 billion, Kobolyev told journalists on July 23 at the Ukraine Crisis Media Center.

Should European and Turkish counter-parties begin signing gas transit contracts with Ukraine, the country could reap other benefits. This first and most obvious is that Gazprom wouldn’t have to be dealt with on transit agreements, since the sale point would shift from Ukraine’s western to its eastern border. Naftogaz and Gazprom have been at loggerheads about debts and pricing for years, leading to periodic gas shut-offs.

A second benefit is higher transit fees. Ukraine has the lowest gas transit fees in Europe, argues Sokolovsky, so Ukraine should be able to eventually raise them.

Third, this proposal might create an opportunity for Ukraine to buy gas form EU operators at the Russian border instead of reverse gas from EU, which is limited, says investment company Eavex energy expert Dmytro Churin. Gazprom has argued that large volumes of reverse-flow gas would violate contracts signed with the Slovak operator Eustream, for example.

The Yatseniuk government has been trying and mostly succeeding in contracting gas supplies from Central Europe via the reverse flow method, whereby Russian gas that had been pumped through Ukraine is sold back to the transit country via European operators. So far, the government has convinced Poland, Hungary and especially Slovakia to sell gas to Ukraine by this scheme. On April 28, the Slovak government said that combined reverse flows from Slovakia, Hungary and Poland could reach up to around 16-17 bcm annually. However, for this year the total should be just 8-10 bcm, Energy Minister Yuri Prodan said at the time.

Last year, Ukraine consumed 50 bcm of gas, of which 28 bcm was bought from Russia, 2 bcm purchased from Europe, and 20 bcm extracted domestically. This year, consumption is expected to be in the mid-40s bcm range.

But things could get complicated on the legal side. On the one hand, Naftogaz says that this deal offers a legal mechanism for Ukraine to maintain Russian gas flow to Europe in light of sanctions. On the other hand,experts argue that European counter-parties have existing contracts with Gazprom, and by extension Ukraine, and so depending on the wording these contracts might not allow the counter-parties to sign transit deals with Ukraine. “An interesting thing here is whether EU companies will be able to renegotiate transfer of ownership for Russian gas on Russian border instead of EU-Ukraine border under current scheme,” explains Eavex’s Churin.

Investment boutique Dragon Capital agrees. “Such a scheme would require amending the existing gas supply contracts between Gazprom and European companies to change the transfer point and exclude costs attributable to transit via Ukraine. Gazprom will actively oppose any steps in this direction and EU counterparties are likely to react cautiously for fear of potential supply disruptions” the company wrote on Aug 11.

The European Commission said it was looking into the details of the proposal.

(Kyiv Post business journalist Evan Ostryzniuk can be reached at ostryzniuk@kyivpost.com).

Kyiv Post.

Russia Steps Up Help for Rebels in Ukraine War

Experts exhumed four unidentified bodies from a mass grave in the eastern Ukrainian city of Slovyansk on Friday. Credit Marion Thibaut/Agence France-Presse — Getty ImagesExperts exhumed four unidentified bodies from a mass grave in the eastern Ukrainian city of Slovyansk on Friday. Marion Thibaut/Agence France-Presse — Getty Images

KIEV, Ukraine — Rather than backing down after last week’s downing of a civilian passenger jet, Russia appears to be intervening more aggressively in the war in eastern Ukraine in what American and Ukrainian officials call a dangerous escalation that will almost certainly force more robust retaliation from the United States and Europe.

Russia has increased its direct involvement in fighting between the Ukrainian military and separatist insurgents, moving more of its own troops to the border and preparing to arm the rebels with ever more potent weapons, including high-powered Tornado rocket launchers, American and Ukrainian officials said on Friday.

The officials, citing satellite images and other military intelligence, said that Russia had positioned heavy weapons, including tanks and other combat vehicles, at several points along the border where there has been intense fighting. On Thursday, Russia unleashed artillery attacks on eastern Ukraine from Russian territory, officials in Washington and Kiev said. While Russia flatly denied accelerating its intervention on Friday, American and Ukrainian officials said Moscow appeared anxious to stem gains by government forces that have succeeded in retaking some rebel-held territory.

The reported Russian moves raised the prospect of a new and more perilous chapter opening in a conflict that has already inflamed the region and, with the destruction of Malaysia Airlines Flight 17 with 298 aboard, stunned the world. American officials blamed a Russian-provided surface-to-air missile for the explosion and hoped the shock of the episode would prompt the Kremlin to rethink its approach, but they are increasingly convinced it has not.

Obama administration officials said Russia’s rising involvement had stiffened the resolve of European leaders who have been reluctant to confront Moscow for fear of damaging their own economies. But there was no appetite for a direct military response, and it remained unclear whether the West could or would take action that may change the calculus of President Vladimir V. Putin of Russia as Moscow seems to devote more firepower to the fight.

American and Ukrainian officials said Russia has moved beyond simply helping separatists and is now engaging directly in the war. Multiple Ukrainian military planes have been brought down in recent days by missiles fired from Russian territory, and now artillery batteries are firing from across the border into Ukraine, the officials said.

“We have detected that firing and that does represent an escalation in this conflict,” said Josh Earnest, the White House press secretary. “It only underscores the concerns that the United States and the international community has about Russian behavior and the need for the Putin regime to change their strategy.”

American officials said Russia has moved 15,000 troops near the border. Col. Steve Warren, a Pentagon spokesman, told reporters that Russia had made “imminent” plans to deliver heavier rockets to the separatists. Instead of Mr. Putin de-escalating the conflict after the Malaysia Airlines tragedy, “he’s actually taken a decision to escalate,” Gen. Martin E. Dempsey, chairman of the Joint Chiefs of Staff, told a security forum in Aspen, Colo.

Vice President Joseph R. Biden Jr. called President Petro O. Poroshenko of Ukraine to express solidarity and pledge to coordinate with allies “about imposing further costs on Russia for its deeply destabilizing and irresponsible actions in Ukraine,” the White House said in a statement.

While the United States has been hesitant to make its intelligence public, Ukrainian officials have provided a daily, running list of Russian incursions, including flights into Russian air space by fighter jets and unmanned surveillance drones, as well as mortar and rocket attacks.

“We have facts of shelling of Ukrainian positions from the territory of Russian Federation,” Andriy Lysenko, a spokesman for Ukraine’s National Security and Defense Council, said at a briefing in Kiev on Friday. “We have facts on the violation of air border between Ukraine and Russia.”

The New York Times.

The #farm that comes as #flatpack #furniture

The Farmbox is 9.3m longThe Farmbox is 9.3m long

“Having your own eggs and knowing where the food comes from is really important, especially in cities,” says Bob Segers, project designer at Studio Segers in Belgium. So he has produced the Daily Needs farmbox, a modular kit that neatly incorporates a chicken coop and vegetable planter into a linear design slim enough to fit the narrowest of plots.

The pine box is composed of interchangeable compartments, so a farmer can purchase three vegetable boxes to latch together, or a string of coops, for instance. Next year, Studio Segers will be selling flat-pack versions across Europe. Future iterations will include a composting bin, a greenhouse, a rainwater collection point and a rabbit hutch. Hen-rearing instructions not included.

The farm that comes as flatpack furniture

Wired UK

Poroshenko: ‘Russian society is full of aggression today’

Ukraine President Petro Poroshenko delivers a speech to the Council of Europe parliamentary assembly in Strasbourg, eastern France, on June 26, 2014.Ukraine President Petro Poroshenko delivers a speech to the Council of Europe parliamentary assembly in Strasbourg, eastern France, on June 26, 2014. © AFP

Note: Here is the full text of the speech given by Ukraine’s President Petro Poroshenko at the Council of Europe parliamentary assembly in Strasbourg, eastern France, on June 26, as published on the president’s official website.

Madam President!

Dear Secretary General!

Dear members of the Assembly!

Dear participants!

Thank you for the invitation to speak to the Assembly.

I am grateful for the opportunity to convey to this respected forum the voice of the Ukrainian people from different parts of Ukraine – eastern and western, northern and southern, free and occupied.

Only a month has passed since the completion of the presidential campaign in the course of which I have travelled all over Ukraine.

I saw it as a peace-loving, hospitable to everyone and European state – not only by location, but also by vocation.

Ukraine has always been a hospitable home for all who came in peace.

Unfortunately, today this home is in danger.

There is a force that came to Ukraine not in peace.

Words like “annexation”, “separatism”, “mercenaries” emerged in our everyday vocabulary again.

What can we do to stop violence and prevent its transformation into a full-scale war?

Unfortunately, today, this issue concerns not only Ukraine. It concerns the whole of Europe.

Dear members of the assembly!

It all started last November when the previous government deprived Ukrainians of their dream refusing the European integration, not asking Ukrainians and not giving anything except corruption and disregard for human dignity. Ukraine got up and the Revolution of Dignity began. The people gained victory. This victory was gained with blood and numerous victims.  Continue reading

Putin renounces right to send troops to Ukraine, Kremlin says

Russian President Vladimir Putin has asked Moscow's upper parliament to revoke a resolution sanctioning the use of military force in Ukraine, the Kremlin has announced.Russian President Vladimir Putin has asked Moscow’s upper parliament to revoke a resolution sanctioning the use of military force in Ukraine, the Kremlin has announced. © Russian Presidential Press and Information Office

Russia’s President Vladimir Putin asked Russia’s upper house on June 24 to revoke the right it had granted him to order a military intervention in Ukraine in defence of Russian-speakers there, the Kremlin said in a statement.

The step seemed certain to be welcomed by the West as a sign that Moscow was ready to help engineer a settlement in Ukraine’s largely Russian-speaking east, where a pro-Russian uprising against Kyiv began in April.

Putin’s spokesman said the Kremlin leader’s move was aimed at assisting fledgling peace talks, which began on Monday, to end the conflict.

Ukrainian President Petro Poroshenko called it a “first practical step” following Putin’s statement of support last weekend for Poroshenko’s peace plan for eastern Ukraine.

Putin’s chief of staff, Sergei Ivanov, said Russia now expected Kiev to respond with measures of its own, without specifying what these should be.In the March 1 resolution, the Federation Council had granted Putin the right to “use the Russian Federation’s Armed Forces on the territory of Ukraine until the social and political situation in that country normalises”.

That resolution, together with Russia’s annexation of Crimea from Ukraine, helped push East-West relations to their lowest ebb since the Cold War and led the United States and Europe to impose sanctions on Moscow.


Editors Note:  This is just a bluff, Putin’s word means nothing! How many times in the past few months has Putin said one thing but done another… We shall see!