Ukraine halts Russian gas imports, transit flights as relations dive

Ukraine halts Russian gas imports, transit flights as relations dive
By bne IntelliNews November 25, 2015

Ukraine has stopped importing Russian gas and banned all Russian transit flights, Prime Mınister Arseny Yatsenyuk said on November 25 as his country's relations with Russia deteriorate further after saboteurs cut Ukrainian power supplies to the annexed Crimean peninsula.

Yatsenyuk said his government had told state energy monopoly Naftogaz to cease natural gas imports from Russia after Ukraine received better offers from European suppliers.

"The government has made the decision to order Naftogaz to stop purchases of Russian gas. They did not cut off gas supplies to us, we are the ones who are not buying it," Yatsenyuk said as quoted by Interfax. Ukraine's gas consumption has collapsed by 20% on the year, making it easier to dispense of Russian gas, the premier added.

Russian energy giant Gazprom claimed earlier that it was the party that cut the flow of gas to Ukraine, alleging Kyiv had failed to make prepayments for gas.

In October, Kyiv and Moscow signed an EU-brokered deal providing for supplies to continue through to March 2016, whereby Russia lowered the price it charges to other countries, around $230 per 1,000 cubic metres.

Gazprom CEO Aleksei Miller warned Ukraine and Europe on November 25 that Ukraine might have stored too little gas to reliably transport Russian gas to Europe through its pipelines. Ukraine's "refusal to buy Russian gas threatens a safe gas transit to Europe through Ukraine and gas supplies to Ukraine consumers in the coming winter," newswires quoted Miller as saying. Naftogaz had already started tapping gas supplies from underground storage before they were even adequately filled for the winter months, he said.

The gas severance comes amid a raft of measures impeding trade and transport with the neighbouring country.

Adding to the fraught relations with Russia, Yatsenyuk also banned Russian transit flights via Ukraine, following mutual bans on direct flights between the two countries imposed earlier in November.

The head of government told officials to inform Russia of "the closure of [Ukrainian] airspace to all Russian airlines without exception". Yatsenyuk said this was a matter of national security, although critics of the move have said it will deplete the revenues of Ukraine air traffic control.

Unidentified pro-Kyiv activist groups on November 20-21 sabotaged Ukrainian power lines supplying the Crimean peninsula, which was annexed by Russia in March 2014. The explosive detonation of electricity pylons - which had Ukrainian flags tied onto them - cut off most electric power on the peninsula and sparked heated exchanges between officials in Kyiv and Moscow.