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Russia and Ukraine again in natural gas dispute

September 05, 2011, 12:45 UTC+3

Natural gas relations between Ukraine and Russia are worsening again

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MOSCOW, September 5 (Itar-Tass) — Natural gas relations between Ukraine and Russia are worsening again. Kiev threatens to liquidate Naftogaz, which will automatically cancel the current gas deal between the two countries. However, Gazprom believes that nothing of the kind will happen. Moscow insists on its old proposal to merge the two countries’ gas monopolies.

On September 1, a letter of Ukrainian Prime Minister Nikolai Azarov addressed to RF Prime Minister Vladimir Putin was passed through the Russian Embassy in Kiev, Novye Izvestiya recalls. It said that “the position of the Russian authorities on the gas issue makes the Ukrainian party to think about breaking the contract on gas supplies through the courts.” It was also reported that “the Ukrainian government has already consulted with local and international experts on the prospects of litigation with Moscow and is ready to commence the proceedings.” Several days later at the CIS summit in Dushanbe, President Yanukovich explained to reporters what was going on: because of the constantly rising prices for gas delivered by Gazprom “the country is losing major funds, so we cannot sit around without taking active steps for settling this issue somehow. We will have to turn to an international court.”

At the CIS summit in Dushanbe Dmitry Medvedev had a brief conversation with Viktor Yanukovich that focused on Russian gas supplies to Ukraine and its transit through Ukrainian territory, Rossiiskaya Gazeta emphasises. Dmitry Medvedev drew the Ukrainian partners’ attention to the fact that the proposals on gas cooperation that were passed to the Russian government have no specifics. Moscow believes that the existing agreement between the two countries fully determines the gas cooperation terms and cannot be revised unilaterally. So, Russia is prepared to defend its position in any court.

Desperate to make Russia reduce gas prices, Kiev came up with a knight’s move - to disband the national join-stock company Naftogaz Ukrainy, so that in accordance with the law to free new gas companies from the 2009 “enslaving” agreements Gazprom, Moskovsky Komsomolets writes. However, even Ukrainian experts are sure that the government of Nikolai Azarov and Naftogaz successors will simply lose in international courts.

However, it will hardly come to shutting off the gas valves, believes the publication. Europe that receives up to 80 percent of Russian gas through the Ukrainian territory may be very upset by the repetition of crisis of the cold winter of 2009. However, it may well come to the Stockholm International Court of Arbitration.

Mikhail Delyagin, Director of the Institute of Globalisation Problems, was quoted by Nezavisimaya Gazeta as saying on this matter: “There is a severe crisis in Ukraine. The only way to survive is integration with Russia, because it (Ukraine) has no other markets where it could work. However, Yanukovich acts contrary to this, not joining the Customs Union. And therefore he cannot count on gas prices’ lowering. And his demonstrative rejection of Russia’s proposals is a gesture of despair.”

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