Identifier
Created
Classification
Origin
09BRUSSELS904
2009-06-30 15:56:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
USEU Brussels
Cable title:
EU - CONCERNS LESSENING OVER RUSSIA/UKRAINE GAS
how-toVZCZCXRO2642 RR RUEHAG RUEHAST RUEHDF RUEHDH RUEHHM RUEHIK RUEHLN RUEHLZ RUEHMA RUEHPB RUEHPOD RUEHROV RUEHSL RUEHSR RUEHTM RUEHTRO DE RUEHBS #0904 1811556 ZNR UUUUU ZZH R 301556Z JUN 09 FM USEU BRUSSELS TO RUEHC/SECSTATE WASHDC INFO RUEHZN/ENVIRONMENT SCIENCE AND TECHNOLOGY COLLECTIVE RUCNMEU/EU INTEREST COLLECTIVE RUCNMEM/EU MEMBER STATES COLLECTIVE RUEHKV/AMEMBASSY KYIV RUEHMO/AMEMBASSY MOSCOW
UNCLAS BRUSSELS 000904
SENSITIVE
SIPDIS
E.O. 12958: N/A
TAGS: ECON EPET EUN
SUBJECT: EU - CONCERNS LESSENING OVER RUSSIA/UKRAINE GAS
SITUATION, BUT LOANS SLOW IN MATERIALIZING
Sensitive but Unclassified - not for Internet distribution.
UNCLAS BRUSSELS 000904
SENSITIVE
SIPDIS
E.O. 12958: N/A
TAGS: ECON EPET EUN
SUBJECT: EU - CONCERNS LESSENING OVER RUSSIA/UKRAINE GAS
SITUATION, BUT LOANS SLOW IN MATERIALIZING
Sensitive but Unclassified - not for Internet distribution.
1. (SBU) Summary. The EU is looking to provide near-term
economic relief to Ukraine help it meet its gas payments.
The funding, most likely in the form of an EBRD loan, would
not be available before late September or early October, and
would be contingent on the implementation of reforms in
Ukraine's gas sector. End Summary.
2. (SBU) On June 29, EU officials convened a conference to
discuss Ukraine's inability to make its gas payments. The
conference was attended by officials from the European
Commission, the Czech Republic, Sweden, Ukraine, Russia,
international financial institutions (IFIs),and
representatives from Gazprom, Naftohaz and European energy
companies. The conference consisted of a series of separate
meetings between the participants, but according to one
source, a plenary of all parties was not convened.
3. (SBU) According to the source, the Ukraine delegation, led
by DepFinMin Umansky, responded to questions from the
Commission and IFIs regarding the volume of gas in storage,
additional volumes needed, and Ukraine's ability to pay for
the gas. When asked whether arrangements could be made with
Russia to pay for the gas, the Ukrainians replied "no."
4. (SBU) The Commission proposed a two billion euro loan to
be financed by the European Bank for Reconstruction and
Development and or the European Investment Bank. The funds
would not be available until late September or early October
and are subject to three conditions: (1) Ukraine's answers to
additional questions to be posed by the IFIs on its capacity
to repay the loan; (2) Ukraine's commitment to implement a
series of reforms; (post is working to obtain a copy of the
list of reforms) and (3) the deployment of monitors to
monitor Ukraine's gas storage. The Commission suggested the
parties reconvene in two weeks to continue the discussion.
5. (SBU) According to the source, the Ukraine delegation
described the proposal as "alarming" in that it provides no
relief over the next three months. Ukraine owes
approximately USD 600 million each month, but Naftohaz's
revenues are only USD 150-170 million. Hughes Mingarelli,
Deputy Director General for RELEX reportedly replied: "talk
to the Russians," who in turn suggested Ukraine form a
consortium with European gas companies to manage its network.
6. (SBU) According to a member of Piebalgs's staff, the
Energy Commissioner is optimistic that a gas crisis will be
avoided in July. Piebalgs met with Gazprom's deputy CEO
Alexander Medvedev on the margins of the conference.
Piebalgs supports the creation of a consortium of Russian,
Ukrainian, and European companies to manage Ukraine's
infrastructure, but others in the Commission (most likely
RELEX) are opposed.
7. (SBU) In a separate conversation, a representative from
RWE said its proposal to provide short-term relief by forming
a consortium of European companies was discussed at length,
but did not receive any support. (He suspects other energy
companies felt slighted because RWE did consult with them
first.) He said no other proposals were submitted, but that
Piebalgs was pressing hard for an EBRD loan. He added that
RWE is skeptical about the 3-way consortium, but that E.On
and Gaz de France are considering the proposal.
Murray
.
SENSITIVE
SIPDIS
E.O. 12958: N/A
TAGS: ECON EPET EUN
SUBJECT: EU - CONCERNS LESSENING OVER RUSSIA/UKRAINE GAS
SITUATION, BUT LOANS SLOW IN MATERIALIZING
Sensitive but Unclassified - not for Internet distribution.
1. (SBU) Summary. The EU is looking to provide near-term
economic relief to Ukraine help it meet its gas payments.
The funding, most likely in the form of an EBRD loan, would
not be available before late September or early October, and
would be contingent on the implementation of reforms in
Ukraine's gas sector. End Summary.
2. (SBU) On June 29, EU officials convened a conference to
discuss Ukraine's inability to make its gas payments. The
conference was attended by officials from the European
Commission, the Czech Republic, Sweden, Ukraine, Russia,
international financial institutions (IFIs),and
representatives from Gazprom, Naftohaz and European energy
companies. The conference consisted of a series of separate
meetings between the participants, but according to one
source, a plenary of all parties was not convened.
3. (SBU) According to the source, the Ukraine delegation, led
by DepFinMin Umansky, responded to questions from the
Commission and IFIs regarding the volume of gas in storage,
additional volumes needed, and Ukraine's ability to pay for
the gas. When asked whether arrangements could be made with
Russia to pay for the gas, the Ukrainians replied "no."
4. (SBU) The Commission proposed a two billion euro loan to
be financed by the European Bank for Reconstruction and
Development and or the European Investment Bank. The funds
would not be available until late September or early October
and are subject to three conditions: (1) Ukraine's answers to
additional questions to be posed by the IFIs on its capacity
to repay the loan; (2) Ukraine's commitment to implement a
series of reforms; (post is working to obtain a copy of the
list of reforms) and (3) the deployment of monitors to
monitor Ukraine's gas storage. The Commission suggested the
parties reconvene in two weeks to continue the discussion.
5. (SBU) According to the source, the Ukraine delegation
described the proposal as "alarming" in that it provides no
relief over the next three months. Ukraine owes
approximately USD 600 million each month, but Naftohaz's
revenues are only USD 150-170 million. Hughes Mingarelli,
Deputy Director General for RELEX reportedly replied: "talk
to the Russians," who in turn suggested Ukraine form a
consortium with European gas companies to manage its network.
6. (SBU) According to a member of Piebalgs's staff, the
Energy Commissioner is optimistic that a gas crisis will be
avoided in July. Piebalgs met with Gazprom's deputy CEO
Alexander Medvedev on the margins of the conference.
Piebalgs supports the creation of a consortium of Russian,
Ukrainian, and European companies to manage Ukraine's
infrastructure, but others in the Commission (most likely
RELEX) are opposed.
7. (SBU) In a separate conversation, a representative from
RWE said its proposal to provide short-term relief by forming
a consortium of European companies was discussed at length,
but did not receive any support. (He suspects other energy
companies felt slighted because RWE did consult with them
first.) He said no other proposals were submitted, but that
Piebalgs was pressing hard for an EBRD loan. He added that
RWE is skeptical about the 3-way consortium, but that E.On
and Gaz de France are considering the proposal.
Murray
.