Identifier
Created
Classification
Origin
08MOSCOW3766
2008-12-30 15:11:00
SECRET
Embassy Moscow
Cable title:
DEMARCHE: AVOIDING GAS SUPPLY DISRUPTIONS FROM
how-toVZCZCXRO7145 OO RUEHFL RUEHKW RUEHLA RUEHNP RUEHROV DE RUEHMO #3766 3651511 ZNY SSSSS ZZH O 301511Z DEC 08 FM AMEMBASSY MOSCOW TO RUEHC/SECSTATE WASHDC IMMEDIATE 1389 INFO RUCNCIS/CIS COLLECTIVE PRIORITY RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY RUEHXD/MOSCOW POLITICAL COLLECTIVE PRIORITY RHEHNSC/NSC WASHDC PRIORITY RHMFISS/DEPT OF ENERGY WASHINGTON DC PRIORITY
S E C R E T MOSCOW 003766
SIPDIS
DEPT FOR EUR/RUS, FOR EEB/ESC/IEC GALLOGLY AND WRIGHT
DOE FOR HEGBURG, EKIMOFF
E.O. 12958: DECL: 12/30/2018
TAGS: EPET ENRG ECON PREL RS
SUBJECT: DEMARCHE: AVOIDING GAS SUPPLY DISRUPTIONS FROM
RUSSIA TO UKRAINE
REF: STATE 134475
Classified By: CDA: ERIC RUBIN
S E C R E T MOSCOW 003766
SIPDIS
DEPT FOR EUR/RUS, FOR EEB/ESC/IEC GALLOGLY AND WRIGHT
DOE FOR HEGBURG, EKIMOFF
E.O. 12958: DECL: 12/30/2018
TAGS: EPET ENRG ECON PREL RS
SUBJECT: DEMARCHE: AVOIDING GAS SUPPLY DISRUPTIONS FROM
RUSSIA TO UKRAINE
REF: STATE 134475
Classified By: CDA: ERIC RUBIN
1. (S) We delivered points per reftel para. 16 to Gazprom's
Director of Foreign Relations, Ivan Zolotov and the Senior
Economic Advisor to the MFA's North America Desk, Vyacheslav
Moshkalo. Both reported that as of 12/30, negotiations
between Russia and Ukraine were underway to resolve the debt
repayment and finalize a new contract for 2009. Zolotov said
that the Gazprom Board of Directors remained firm that
Ukraine's debt payments must be made before a new contract
was signed. He added that Gazprom intended to fulfill all of
its contractual obligations to its European customers.
Construction of the South Stream and North European Gas
Pipelines would proceed "at all costs" in order to bypass the
"problematic transit countries", i.e., Ukraine.
2. (U) Gazprom Chairman Aleksei Miller announced on the
12/30 "Vesti" television news program that if Ukraine did not
settle its outstanding gas debt, Gazprom would "have no
basis" for continuing supplies after January 1. Furthermore,
as of 2009, Ukraine would pay the "market" price for gas:
$418 per thousand cubic meters (msm).
3. (S) MFA's Moshkalo told us that Ukraine's outstanding
debt was about $3 billion. Both sides were exploring means
to reach a settlement, such as Ukraine's paying of part of
its debt with future earnings from gas transit fees. In the
final analysis, however, Gazprom and GOR stood by their claim
that gas trade with Ukraine was essentially a commercial
matter and that Ukraine must abide by its contractual
obligations. Moshkalo added there was sympathy for Ukraine's
economic plight, but Gazprom and the Russian economy were
also struggling with the global financial crisis. He
concluded that every effort would be made to ensure
uninterrupted supply to Gazprom's other European customers.
4. (S) Comment: Contrary to 2006, when gas prices were
climbing, the GOR's financial future looks much more
precarious this year. Russia's oil and gas-fueled reserves
are rapidly dwindling owing to the fall in global energy
prices, a $200 billion rescue program for beleaguered
corporations and banks, and efforts of the Central Bank to
stave off a rapid devaluation of the ruble. The need for
cash from European gas sales and the fact Ukraine remains the
main transit route are compelling reasons for the Russians
not to cut off supplies on January 1. We will continue to
engage with the GOR on this and watch it closely. End
Comment.
RUBIN
SIPDIS
DEPT FOR EUR/RUS, FOR EEB/ESC/IEC GALLOGLY AND WRIGHT
DOE FOR HEGBURG, EKIMOFF
E.O. 12958: DECL: 12/30/2018
TAGS: EPET ENRG ECON PREL RS
SUBJECT: DEMARCHE: AVOIDING GAS SUPPLY DISRUPTIONS FROM
RUSSIA TO UKRAINE
REF: STATE 134475
Classified By: CDA: ERIC RUBIN
1. (S) We delivered points per reftel para. 16 to Gazprom's
Director of Foreign Relations, Ivan Zolotov and the Senior
Economic Advisor to the MFA's North America Desk, Vyacheslav
Moshkalo. Both reported that as of 12/30, negotiations
between Russia and Ukraine were underway to resolve the debt
repayment and finalize a new contract for 2009. Zolotov said
that the Gazprom Board of Directors remained firm that
Ukraine's debt payments must be made before a new contract
was signed. He added that Gazprom intended to fulfill all of
its contractual obligations to its European customers.
Construction of the South Stream and North European Gas
Pipelines would proceed "at all costs" in order to bypass the
"problematic transit countries", i.e., Ukraine.
2. (U) Gazprom Chairman Aleksei Miller announced on the
12/30 "Vesti" television news program that if Ukraine did not
settle its outstanding gas debt, Gazprom would "have no
basis" for continuing supplies after January 1. Furthermore,
as of 2009, Ukraine would pay the "market" price for gas:
$418 per thousand cubic meters (msm).
3. (S) MFA's Moshkalo told us that Ukraine's outstanding
debt was about $3 billion. Both sides were exploring means
to reach a settlement, such as Ukraine's paying of part of
its debt with future earnings from gas transit fees. In the
final analysis, however, Gazprom and GOR stood by their claim
that gas trade with Ukraine was essentially a commercial
matter and that Ukraine must abide by its contractual
obligations. Moshkalo added there was sympathy for Ukraine's
economic plight, but Gazprom and the Russian economy were
also struggling with the global financial crisis. He
concluded that every effort would be made to ensure
uninterrupted supply to Gazprom's other European customers.
4. (S) Comment: Contrary to 2006, when gas prices were
climbing, the GOR's financial future looks much more
precarious this year. Russia's oil and gas-fueled reserves
are rapidly dwindling owing to the fall in global energy
prices, a $200 billion rescue program for beleaguered
corporations and banks, and efforts of the Central Bank to
stave off a rapid devaluation of the ruble. The need for
cash from European gas sales and the fact Ukraine remains the
main transit route are compelling reasons for the Russians
not to cut off supplies on January 1. We will continue to
engage with the GOR on this and watch it closely. End
Comment.
RUBIN