POTENTIAL GAS SUPPLY DISRUPTIONS FROM RUSSIA TO

C O N F I D E N T I A L WARSAW 000002 SIPDIS FOR EUR/CE, EUR/RUS, EUR/UMB, EUR/ERA AND EEB/ESC/ISC E.O. 12958: DECL: 12/29/2018 TAGS: ENRG EPET PREL RU PL SUBJECT: POTENTIAL GAS SUPPLY DISRUPTIONS FROM RUSSIA TO UKRAINE REF: A. SECSTATE 134475 ¶B. KYIV 2531 ¶C. BERLIN 1724 Classified By: DCM Quanrud for reasons 1.4 (b) and (d) ¶1. (C) Summary. Reporting from the Polish Embassy in Kyiv, conveyed to us by MFA's Economic Department, confirms reports from Embassy Berlin and Kyiv (Refs B and C) that the Ukrainians have found a way to pay gas debts to Gazprom and will avert a shutoff on January 1. That said, Polish authorities are confident that through rerouting, tapping reserves, and ultimately limiting industrial usage, they could ride out a lengthy gas supply disruption from the Ukraine without affecting Poles' ability to heat their homes. End Summary. Poles Hear Ukrainians Will Pay Debt to Gazprom -------------- - ¶2. (C) MFA Energy Unit Chief Ryszard Vojter conveyed to EconOff January 31 reports from the Polish Embassy in Kyiv and the Polish state-owned oil and gas company (PGNiG) that the Ukrainians were prepared to pay the debt and there would be no disruption on January 1. (Note: PGNiG is about to begin their own negotiations with Gazprom to renew their multiyear contract which is set to expire in one year.) Poland Prepared to Weather the Storm -------------- ¶3. (C) EconCouns called separately on Maciej Wozniak, the Prime Minister's chief advisor on energy security policy, January 30 to discuss Polish preparations for a possible gas supply disruption from Russia to Ukraine, as well as Polish, EU, and U.S. diplomatic activity to avert a disruption. Wozniak appeared focused on internal preparations for a disruption. Poland gas storage capacity is full. Workers in Polish pipeline and internal gas distribution systems are on alert over the New Years holiday and are prepared to reroute gas in the event of lost volumes - which should arrive in Poland at 0800 local time (GMT 1),assuming a 0000 local shut-off at the Russian-Ukrainian border (GMT 2). ¶4. (C) The GoP has requested that Gazprom and RosUkrEnergo reroute a portion of lost gas volumes through the Yamal pipeline via Belarus, which has spare capacity. Wozniak believes Poland will be able to survive an interruption for five to seven days without affecting domestic gas service. Beyond that, the government would begin to reduce service incrementally to large industrial gas consumers, but in no case does it believe the crisis will affect basic heating or other critical services. ¶5. (C) Wozniak was hungry for any information the USG could provide on the situation in Kyiv, though he took a somewhat fatalistic approach to the dispute between Moscow and Kyiv. When asked about Polish efforts in Kyiv to avoid a disruption, he shrugged and asked, "who do we talk to?" and suggested that external influence on the dynamic between Russia and Kyiv would be limited. ¶6. (C) In a January 31 call, Maciej Kaliski, Director of the Economy Ministry's Oil and Gas Department, told Econoff that Minister of Economy (and Deputy Prime Minister) Pawlak had already called his counterpart, the Ukrainian Vice Premier and that Prime Minister Tusk planned to call his counterpart later today to urge resolution of the dispute without a shutoff. However, Kaliski was confident regarding Poland's position. Echoing Wozniak's statement that gas storage was full, he explained how this gave the Poles approximately 40 days of supply without rationing or otherwise limiting usage. With rerouting plans, Poland could get through the next three or four months before it would have to begin limiting supplies to industrial users. No one, he said, expects a shutoff would last that long. ¶7. (C) Comment. All of our contacts expressed varying degrees of skepticism that Polish or other external entreaties to Kyiv would have a significant impact on the Kyiv-Moscow dispute. They were largely focused on internal preparations to get through what they, at worst, expected would turn out to be a short duration interruption in supply. ASHE