Putin: Gas supplies to Europe could suffer in 3-4 days if Kiev doesn't pay for future deliveries.

Putin: Gas supplies to Europe could suffer in 3-4 days if Kiev doesn't pay for future deliveries.(RT).

Russia will cut off gas supplies to Ukraine if Kiev fails to pay in “three or four days,” President Vladimir Putin said, adding that this "will create a problem" for gas transit to Europe.


Russia will completely cut Ukraine off gas supplies in two days if Kiev fails to pay for deliveries, which will create transit risks for Europe, Gazprom has said.

Ukraine has not paid for March deliveries and is extracting all it can from the current paid supply, seriously risking an early termination of the advance settlement and a supply cutoff, Gazprom's CEO Alexey Miller told journalists. The prepaid gas volumes now stand at 219 million cubic meters.

"It takes about two days to get payment from Naftogaz deposited to a Gazprom account. That's why a delivery to Ukraine of 114 million cubic meters will lead to a complete termination of Russian gas supplies as early as in two days, which creates serious risks for the transit to Europe,” Miller said.

Earlier this month, Russian Energy Minister Aleksandr Novak estimated Ukraine's debt to Russian energy giant Gazprom at $2.3 billion.

In the end of 2014, Kiev's massive gas debt that stood above $5 billion, forced Moscow to suspend gas deliveries to Ukraine for nearly six months. On December 9, Russia resumed its supplies under the so-called winter package deal, which expires on April 1, 2015.

Naftogaz said it would not make advance payments for Russian gas without knowing Gazprom will implement its side of the contract, and the EU - brokered 'winter plan.'

“Europe currently is the main source of gas supplied to Ukraine, that’s why the flawless implementation of our liabilities to transport gas to the EU is our major strategy,” the head of Naftogaz, Andrey Kobolev said.

On Monday, Ukrainian state energy company Naftogaz accused Gazprom of failing to deliver gas that Kiev had paid for in advance. Naftogaz says Russia has broken an agreement to deliver 114 million of cubic meters of natural gas to Ukraine by delivering only 47 million cubic meters.

During a meeting with President Vladimir Putin on February 20, Russian Prime Minister Dmitry Medvedev expressed concern about an increase in daily applications by Ukraine for the supply of gas, TASS reports.

He noted that "Ukraine's consumers have requested a larger supply; the volume has increased by 2.5 times. This means that the prepaid volumes left are enough for no more than two to three days.”

Last week, Medvedev ordered the energy minister and the head of Gazprom to prepare proposals on fuel deliveries to the self-proclaimed Republics of Donetsk and Lugansk (DPR and LPR) after Kiev had cut off the delivery pipeline into the southeastern regions. Hmmm......The problem of Ukraine their 'Gas Reserves' is way bigger then what the story mentions.

Related:  Ukraine gas-supply agreement end in two months, Gas storage at all time low.

With less than two months before Ukraine’s Russian gas-supply agreement ends, analysts are warning of critically low storage that would threaten all of Europe.

There’s been little progress on a new deal before the March 31 expiry, with Russia saying it will revert to a standard contract based on disputed prices that won’t be reviewed by international arbitrators until 2016. If the supply stops, then Ukraine’s inventories may shrink to the smallest in a decade by Oct. 1, says Eclipse Energy Group, a consultant in Norway.

That raises the risk that Ukraine will need to use Russian gas destined for the European Union next winter, according to Energy Aspects Ltd., a London-based consultant. The 28-nation EU is seeking to help broker a new deal because Russia supplies a third of its gas, with 40 percent flowing through pipelines across Ukraine. Flows to Europe via Ukraine were disrupted during pricing disputes in 2006 and 2009.

“If they cannot re-inject enough gas, the risks for Europe will be greater next winter than this winter,” May Mannes, head of gas and liquefied natural gas analysis at Stavanger, Norway-based Eclipse, said by phone Jan. 22. “Ukraine’s need for storage re-injection has been overlooked by many.”

Ukraine will have 10 billion cubic meters in storage in October if it only gets fuel from the EU and its own production, said Mannes, who has tracked the industry for two decades. That compares with 16.6 billion last October and 23.1 billion on average in the past 10 years. Read the full story here.