Ukraine calls for sanctions against Russia’s Gazprom after Kiev lost gas imports

Kiev / Moscow, October 1 (Reuters) – Ukraine on Friday called on the United States and Germany to impose sanctions on Russia’s Gazprom (GAZP.MM), which it accused of using energy as a weapon after the energy giant signed a transit deal with Hungary withdrew gas supplies from Kiev.

Under a long-term supply contract with Budapest that came into force on Friday, Gazprom will no longer deliver its gas to Hungary via the Ukraine, but via Serbia and Austria.

This deprives Ukraine of transit revenue and also means that it can no longer import reverse flow gas via Hungary, which it has been doing since 2015 in order not to purchase gas directly from Russia.

Relations with Moscow have been in crisis since the annexation of Crimea in 2014 and support for a separatist uprising in eastern Ukraine.

Yuriy Vitrenko, the head of the Ukrainian Naftogaz, called on Washington and Germany to keep what he believed to be promises made in connection with the separate Nord Stream 2 gas pipeline to Germany to crack down on Moscow.

“The Kremlin is doing this on purpose. It’s not even saber rattling, it’s the obvious use of gas as a weapon,” Vitrenko said on Facebook.

“A joint statement by the United States and Germany said that if the Kremlin used gas as a weapon, there would be an appropriate response. We are now waiting for sanctions to be imposed on a wholly-owned subsidiary of Gazprom, the operator of Nord Stream. ” 2. “

He was referring to an agreement between Berlin and Washington on Nord Stream 2 that was reached in July. Continue reading

The dispute comes at a sensitive time for Russia, which is demanding that Germany certify the Nord Stream 2 gas pipeline to Germany after its completion. Russia is faced with accusations from Kremlin critics that it is trying to speed up this approval process by deliberately not doing enough to supply Europe with gas during an energy crisis that has led to a spike in spot gas prices.

Russia rejects the allegations.

There was no immediate response from Washington or Berlin to Vitrenko’s call. The Kremlin rejected the Ukrainian criticism as unfounded and politicized.

Kremlin spokesman Dmitry Peskov said Russia was meeting all of its obligations under existing gas contracts.

“There were and will be allegations against Russia, most of them politicized,” said Peskov when asked about Ukraine’s complaints.

“The most important thing in this situation is that we consistently meet our obligations.”

Gazprom did not respond to a request for comment.

‘SHOCKING RISE’ IN GAS PRICE

Russian gas deliveries through the Yamal-Europe pipeline, which crosses Poland, fell by almost 77% on Friday compared to Thursday, data from network operator Gascade showed, as Gazprom had booked only a third of the capacity available for October.

The Russian company has repeatedly stated that it is supplying gas to its customers in full compliance with existing contracts and that additional supplies could be made available after Nord Stream 2 launches.

Gazprom’s natural gas exports outside the former Soviet Union increased by 15.3% year-on-year to 145.8 billion cubic meters (bcm3) in the first nine months of 2021, the Russian gas producer announced on Friday.

Ukraine hopes that the European Union, of which it is not a member, will intervene and curb Gazprom.

“Gazprom’s monopoly of gas routes, which we are now observing, raises the question of the fundamental principles of functioning of the EU (European Union) gas markets – competition and transparency,” said Sergiy Makogon, the head of the Ukrainian gas operator of the transmission network.

“The strengthening of an actor’s dominant position and leverage for apparently political purposes against the backdrop of a shocking rise in gas prices in Europe must stop,” he said.

Ukraine has spoken out against Russia’s new gas deal with Hungary, calling it a “purely political, economically unreasonable decision” this week. She has asked the EU executive to assess whether it respects European energy law. Continue reading

Kiev is also campaigning for the West to try to prevent the Nord Stream 2 pipeline, which runs by Ukraine, from going into operation.

German utility Uniper, part of the group of western companies that support Nord Stream 2, said on Friday it doesn’t expect the pipeline to ease the strained global gas market this winter as an operating license is unlikely to be issued anytime soon. Continue reading

UKRAINE AND HUNGARY NEAR ODDS

The dispute over the gas business has turned into a bilateral dispute between Kiev and Budapest, who already disagree over the use of the Hungarian language in Ukrainian schools.

Hungary accused Ukraine of meddling, and on Friday Prime Minister Viktor Orban rejected Ukraine’s criticism of the gas supply agreement. Continue reading

Orban, who faces his first competitive pick next year after three landslide victories since 2010, said Hungarians would have to pay much higher prices without the gas deal.

“We need gasoline. That is the reality. You (the Ukrainians) have to agree to the Russians,” Orban told the public broadcaster.

Reporting by Natalia Zinets and Andrew Osborn Additional reporting by Vladimir Soldatkin, Dmitry Antonov and Tom Balmforth in Moscow and Krisztina Than in Budapest Writing by Matthias Williams and Andrew Osborn Editing by Alexander Smith and Frances Kerry

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