Putin Turns the Gas Down

mike65

Is this a harbinger of thing to come?

Russia has just taken over the G8 talking shop for the year as the country continues to slide backwards into a one party state while threatening neighbours with the curtailing of energy supplies. Ukraine, with whom Russia has frosty even hosile relations has had its gas supply cut off having not agreed to a 5 fold price hike. Other countries are feeling the effects as supplies take a dip in pressure.

With the Kremlin taking control of more of Russias energy it looks like Putin and his chosen successor will be rewarding those who tow the line as the 21st century unfolds.

Ukriane punished for the Orange revolution today...who tomorrow?

Mike.

Ping Chow Chi

mike65 wrote:

Is this a harbinger of thing to come?

Russia has just taken over the G8 talking shop for the year as the country continues to slide backwards into a one party state while threatening neighbours with the curtailing of energy supplies. Ukraine, with whom Russia has frosty even hosile relations has had its gas supply cut off having not agreed to a 5 fold price hike. Other countries are feeling the effects as supplies take a dip in pressure.

With the Kremlin taking control of more of Russias energy it looks like Putin and his chosen successor will be rewarding those who tow the line as the 21st century unfolds.

Ukriane punished for the Orange revolution today...who tomorrow?

Mike.

There are only a few benefits of being in Russia’s so called ‘sphere of influence’. If the Ukraine wants to leave that sphere then I guess Russia has the right to remove their benefit. You can not have your cake and eat it too.

Maybe the EU will help sub the price hike? Or maybe the Ukraine will hike the price it charges Russia to pipe gas through their country. But it seems to me that Russia is only asking for the same amount that it charges other countries outside its sphere of influence.

The Ukraine have said that they will pay an increase - but want it phased in, I guess its all about how steap the phases are and how long they want before paying the full wack.

Thomond Pk

I've little sympathy for the Ukraine they were getting gas at 20% of the market price they have now been asked to pay the same as everyone else and get to keep 15% of the gas flowing in pipes accross their territory.

jank

Putin just wants to flex his muscles.

American Eyes are elsewhere, Europe is seen as week so Russia wants it self to be one respected again among nations and the next few years is a chance to do it.

Also lets not forget what this is really about....gas, oil, energy.
Russia is one of the biggest energy producers in the world and its giving the world a little reminder of it.

Interesting times ahead...

Victor

Note there is a consortium building a pipeline through the Baltic from St. Petersburg to Germany - a direct link from Russia to the original EU, bypassing Belarus, Ukraine, Poland & Hungary.

Not only does Ukraine get cheap gas, but they get a 15% fee for use of the pipeline.

Expect things to get difficult.

Thomond Pk

It was stated by Gazprom that $25m of gas was siphoned off on top of the 15% 'transit fee'. If a customer doesn't pay their bill here Bord Gas will cut them off and no one other than Joe Higgins will claim that it is politically motivated.

Hobbes

On the other hand the pipe from Russia to Europe goes through thier country. So shutting them off effectively shuts off the EU too.

[edit]

actually reading on it some more appears they have pipes that bypass. Wasn't how it was spun this morning on TV.

mike65

Here's a little subplot to this story

KIEV - Ukraine will receive 40 billion cubic meters of natural gas from Turkmenistan in 2006, Prime Minister Yuriy Yekhanurov said Friday.

Speaking on Ukrainian radio, Yekhanurov refused to state how much the gas from the Central Asian republic would cost, saying it would be announced by Ukrainian President Viktor Yushchenko later.

In his comments on the recent agreement between Russian energy giant Gazprom and Turkmenistan on the purchase of 30 bln cu m of natural gas, Yekhanurov said Ukraine would get its share of gas anyway because a bilateral agreement had already been signed. However, the gas will have to travel through the Russian pipeline network to reach Ukraine.

So if Ukriane wished to source gas from a third country Putin is making a point....

meanwhile just to make the point further

Gazprom said on Thursday that it had agreed to buy 30 billion cubic meters of gas from Turkmenistan in 2006, up from the previously planned 10 billion in 2005, in a move that pointedly made things worse for Ukraine.

In the first quarter alone, Gazprom would buy 15 bcm, which amounts to almost all Turkmen exports, it said in a statement.

Turkmenistan has been selling 36 bcm to 37 bcm to Ukraine annually. Gazprom's increased purchases of Turkmen gas will reduce the volume available for Ukraine to 14 bcm to 15 bcm.

"This deal gives Gazprom one more trump card in its dispute with Ukraine," said energy analyst Valery Nesterov of brokerage Troika Dialog . "It is crystal clear that given Turkmenistan's flat gas production, the Gazprom deal reduces volumes that are available for direct purchases by Ukraine."

Oh yes the boss of Gazprom Alexander Medvedev is likely to be Putins successor if it can be engineered.

Mike.

mike65

Whoops

Mike.

mcgarnicle

i think it is a mistake by russia, it is the first time that russian oil has been politicised. Even during the cold war the russian oil was kept as a sepperate issue to the cold war politics going on. Look at what happened the first time opec flexed its muscles, the north sea oil reserves were discovered and oil prices fell. This move will scare oil company's in russia and they will now be searching for other areas outside of russia, putin has made a mistake

Blueshift

This event foreshadows future conflicts with neighbour countries of Russia. Putin is on his way to force back democratic structures in his realm.