Ukraine has not so far met the terms imposed by Itera for the resumption of natural gas supplies to the country’s electricity generating companies, Itera International Group of Companies press secretary Mykola Semenenko, told The Day on February 6.
According to the Itera official, Ukraine’s debt to Itera has dropped only insignificantly from $64.2 million to $5 million, and the Ukrainian side has not submitted the debt settlement schedule, “despite its obligation to do this by January 25.” Itera needs live cash, among other things, to pay for the transit pumping of the Turkmenistan gas to Ukraine (Itera is an operator for the transit of this gas to the Ukrainian border — Ed.). We are pumping the Turkmenistan gas via three countries and have to pay the transport fees for January and February,” Itera’s representative stressed. He also noted that Itera is still considering the suspension of Turkmen gas supplies to Ukraine, unless Kyiv takes urgent steps to pay off its debt. In his reaction to Itera President Igor Makarov’s letter to him, stressing similar debt settlement issues, President Kuchma criticized Prime Minister Viktor Yushchenko and Fuel and Energy Minister Serhiy Yermylov for their failure to get the situation in the gas supply sector under control amid threats of cutoffs by Itera.
Meanwhile the share of cash payments for the natural gas consumed in January has dropped, Premier Yushchenko’s press secretary, Natalia Zarudna, admitted. As of January 20, total customer payments reached UAH 180.8 million, with the share of cash payments at 37.2%, against 49.2% in December of 2000.
Referring to Viktor Yushchenko, Ms. Zarudna said on February 2 that Ukraine has paid approximately UAH 100 million to Itera for past supplies of gas.
Since January 16, Itera has cut natural gas supplies to Ukraine’s four electricity generating companies due to their failure to meet payment commitments. In two weeks and on the same day that Zarudna made her statement, Deputy Fuel and Energy Minister of Ukraine Yuri Sakva told the Interfax-Ukraine Agency that these companies have switched to Turkmen gas, paying for its supplies to Naftohaz Ukrayiny (Oil & Gas of Ukraine) and simultaneously continue to pay off their debts to Itera. A source in the Fuel and Energy Ministry’s Department for Electric Power Engineering told Interfax-Ukrayina that, as of January 20, the generating companies started to buy gas from the Haz Ukrayiny’s (Gas of Ukraine) Trading House under conditions of 100% cash payment. “The generating companies have signed supply contracts with the Haz Ukrayiny Trading House. We and our customers don’t care much whose gas they are buying, Turkmen, Itera’s, or domestically extracted. Most important is that gas supplies must not stop,” our source added. In February, Naftohaz Ukrayiny pledged to increase gas supplies to electricity generating companies from 14.5 to 21 million cu. m. a day, after Fuel and Energy Ministry experts said that the available coal supplies at the country’s thermal power plants were critically low. According to experts, if gas supplies to the power plants are not raised, Ukraine will face acute shortages of electricity after February 25. Meanwhile, West Donbas coal mines have also decided to suspend supplies of coal to electric companies because of payment arrears. Judging by the statement of the leader of Dnipropetrovsk coal miners’ trade union, Serhiy Yunak, payments originally earmarked for coal mines go now to pay for gas.
On the one hand, one gets the impression that last year’s naive scenario is being repeated, whereby the generating companies ceased to buy Itera’s gas in early spring, switching over to Naftohaz Ukrayiny’s gas and stopping, in line with the declarations of Ukrainian officials, to illegally siphon off Russian export gas from transit pipelines. But some facts, however, do not add up. Since Itera has turned off its gas tap, cutting supplies to Ukraine, and since the amount of gas being pumped to Ukraine’s border via Russia’s pipelines has not changed, some kind of borrowing must be taking place. Given that the generating companies have turned their backs on Itera, where does the surplus gas go? Who is paying whom? Russia’s Gazprom central control department head Boris Posiagin reaffirmed to The Day that, following the suspension of gas supply by Itera, “the general volumes of gas supplied to Ukrainian clients have stayed at the same level.” According to the Gazprom official, “daily scheduled gas supplies to Ukraine come to 213 million cu. m. The Ukrainians took 226 million cu. m. on February 4 and 210 million on February 5, thus staying within the limits of the January schedule... Ukraine will likely go beyond the amount of gas which it receives from Gazprom as payments for the transit of the Russian gas via Ukraine,” Posiagin predicted.
COMMENTARY
Yuri ZBITNEV, President, RTV Company:
The gas which Itera has declined to supply and which Russia is still selling Ukraine seems to have no owner, a kind of a no man’s gas. It looks likely, however, that Ukraine will be forced to use the 5 billion cu. m. standby gas reserve created by Russia to stop gas siphoning by Ukraine. Unfortunately, Russia and Ukraine have not worked out any payments procedure, believing, as in the past years, that the issue will be sorted out in the future. It’s not unlikely that in late February some whistle blower will point to another illegal tapping of Russia’s gas or to Ukraine re-exporting gas to Europe, something Russia dreads. So far, however, everyone seems to be looking the other way.
