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Ukraine pays gas bill to avoid fresh gas crisis
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08:41, March 06, 2009

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Ukraine's energy giant Naftogaz paid its February debt for Russian gas in full on Thursday following Russian Prime Minister Vladimir Putin's threat to cut off gas deliveries to Ukraine and possibly European countries if Kiev failed to pay the bill by Saturday.

Putin's remarks came a day after Ukraine's national security service broke into the headquarters of Naftogaz as part of an investigation into alleged diversion of a huge amount of Russian gas.

"If this payment is not made as a result of the recent operations and arrests of some officials, it will lead to the halt of our energy supplies both to consumers in Ukraine and to consumers in Europe," Putin told a meeting of governmental presidium.

The threat raised concern over a repeat of the January gas crisis, which left millions of Europeans shivering in the depths of winter.

Just hours after Putin's warning, Naftogaz said it had sent to Russia the final installment of the 360 million U.S. dollars it owed for gas consumed in February. The Russian state gas monopoly Gazprom confirmed that Naftogaz had made a full payment for February supplies.

Russia supplies a quarter of EU's gas needs, with 80 percent of the exports sent through Ukrainian pipelines. The energy supplier suspended gas flows to Ukraine on the New Year's Day over a pricing dispute, and halted gas shipments via Ukraine to Europe a week later.

Gazprom resumed gas supplies to Ukraine and European customers eventually under a gas deal inked after talks in Moscow between Putin and his Ukrainian counterpart Yulia Tymoshenko.

However, the agreement brokered by Tymoshenko, under which Ukraine is to pay a higher price for imported Russian gas, was criticized by Ukrainian President Viktor Yushchenko, who has been seeking EU and NATO membership for his country.

The Ukrainian security agents on Wednesday searched the offices of Naftogaz for what company officials called the original copies of the January gas supply deal with Gazprom. Naftogaz said the documents were not confiscated.

The raid was seen as a display of the escalating tensions within the Ukrainian leadership, because the national security service is controlled by Yushchenko and Naftogaz answers to the government led by Tymoshenko.

Ukrainian security service forces tried on Thursday to conduct another search at Ukrtransgaz, a Naftogaz subsidiary operating Ukraine's gas pipelines. But lawmakers from Tymoshenko's parliamentary faction prevented the investigators from entering the offices.

The Ukrainian parliament on Thursday set up an ad interim commission to probe the legitimacy of actions taken by the security service regarding the Naftogaz raid.

The security service, which opened a criminal case over the alleged gas diversion, insists that RosUkrEnergo, until recently an intermediary in Russian gas supplies to Ukraine, is the owner of the gas.

While Yushchenko backed the tough move against Naftogaz, Tymoshenko regarded it as an attempt to take over the 11 billion cubic meters of gas in a bid to secure funds for the upcoming presidential election.

The turmoil came at a time when Ukraine's economy has been battered by plummeting industrial production and falling currency value against the dollar amid the current financial crisis.

The former Soviet republic also risks losing the second tranche of a stand-by loan from the International Monetary Fund (IMF) due to its failure to trim government spending. In order to keep the loan program intact, Yushchenko and Tymoshenko briefly abandoned their antagonism this week to make a joint submission to the IMF.

Source:Xinhua



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