Russia, Ukraine, Europe and natural gas

[LePaul]

Yes, I'd read about that a few days ago.

Ukraine was getting a great deal on gas for quite some time and Russia wanted them to pay the fair market value, considerably more.  A 400% increase is quite a boost.  Ukraine wanted to phase in the increase but from the article I read, it didnt indicate if any such negotiations happened.

On one hand, yup, I see their point for wanting to get fair market value.

Yet on the other, its Russia's style to deal in ultimatums or do anything to make a recently independent country bow and realize it needs to deal with Russia and its ultimatums.

In summary...glad Im here, not there.

[Boroda]

Originally posted by Pei
You are failing to mention that Gazprom signed a 5 year contract in 2004 to supply the gas at the discount price. Whether or not that was sensible or not they signed a contract and should stick to it.

It is not true. There was no fixed price. Price had to be determined every year before Jan, 1st.

Funny facts: current Ukrainian gas consumption is 1.5 times more then in 1990, with industry working at less then 50% from 1990.

We shipped gas for $45 per 1000 cubic meters to Ukraine, at the same time they re-sold it to Romania and other countries for $200. Should we keep sponsoring corrupt Ukrainian regime or use European prices instead? Look, in the UK they pay over $500, ten times more then orange gang wanted to pay!

They declared they are independant and want to host NATO bases. Maybe we should pay for that bases too?

[Boroda]

Originally posted by StSanta
A 400% increase in price, porbably motivated by political factors rather than financial necessity.

Some EU states (Latvia etc) still pay less than a third of the new price for Ukraine.

Pribaltika pays market prices. Costs of delivery to Pribaltika are much smaller. And they definetly pay over $100. Ukraine now pays $95.

Originally posted by StSanta
European governments are having serious concerns about Russias current and future energy policies and Russia's ability to remain a fair partner, despite Putin's assurance to be just that. It's also widely seen as Russia flexing its muscles and indicating its regional importance - some even see it as the first action taken in an attempt regain its former status as a world superpower.

Stocks in Danish alternative energy companies have seen a boost.

As with Russian things in general - very stubborn and either very brave or very stupid move by Putin. He's a smart dude, though and I gather he has judged the political landscape accurately.

Essentially, he's said "Dudes. We. Got. Power. Don't forget that".

Sure, some people have to be always reminded about that, and that so-called "democracy" can't heat your oven.

Ultimatums are usually written when other party doesn't understand other languages.

[ghostdancer]

Btw, yes the news over hear did say that Russia wanted to charge the Ukraine the going rate. Basically the same price that they charge Europe.

Just that the Ukraine was upset about losing its lower rate and saying that its people could not afford the new price since they don't make anything like what their Europeans counter parts do in daily wages.

[Nilsen]

Been all over the news here Boroda since it started.

Short version:

Ukraine did not want to pay market price.
Russia wants market price and turned the gass to Ukraine off when they did not want to pay market price.
Ukraine steals gass from the pipelines that goes to EU (or so the gass company says anyway)
Russia has turned on the gass again after some sort of agreement have been made.
The plans for a submerged pipeline to the EU from Norwegian gass fields have gained momentum.

[StSanta]

Originally posted by Boroda
Sure, some people have to be always reminded about that, and that so-called "democracy" can't heat your oven.

Ultimatums are usually written when other party doesn't understand other languages.

And ultimatums are often reacted upon - with the outcome not always being desireable for the one making it.

Make no mistake about it - Russia may have the power to bully Ukraine and other former USSR states but it falls far short of being able to command Europe, together with its mighty North American allies.

Russia even tried that when we had that Chechen fellow here. Wanted him arrested and imprisoned. Little Denmark said "no", knowing its big pals had its back covered.

Democracy is *precisely* the reason why our economies are much stronger than the Russian one. And democracy and the strong economy it allows is also precisely the reason we don't have to use Russian gas, or gas at all, to heat our ovens.

Boroda, you know I like Russia and Russians. I am capable of seeing beyond the surface. I don't think you should overestimate the current capabilities of your motherland though - in terms of economic and political power, it falls short of Europe as a whole and the US as a sole entity. In terms of military power, there's a very wide margin in favour of the US.

This is not to say that Russia won't be more powerful in the future.

I remember very clearly when I was in Kolomna and some German skydivers had requested that the tail gate was removed from the MI-8 helicopter. At the end of the day, the drop zone managers voice could be heard on the loudspeakers

"Tailgate to go on helicopter. We need strong men from little countries.". Was very amusing to look at the disapproving faces of the Germans


Anyway, as it stands right now, today, I think any attempts at giving the Europeans or Americans ultimatums is going to hurt Russia.