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Russia's Gas Showdown"


"The essence of the policy's new direction is not to restore the influence of Russia, which has been allegedly lost in the process of orange revolutions," the official said on condition of anonymity. However, he added, Russia would not tolerate an arrangement in which it receives neither economic nor political benefits from selling discounted oil and gas.

The criteria for having the tiff now: Ukraine under anything but an expressly pro-Russian leadership gets to pay full market price.

Elsewhere, we see this exchange...


Last week, officials in Kiev suggested that Ukraine raise rent prices for the housing of Russia's Black Sea Fleet in the Ukrainian port of Sevastopol. On Tuesday, Russian Defense Minister Sergei Ivanov indicated in response that Kiev could not legally raise the rent prices, which are laid out in a contract that is valid until 2017.

Which raises the issue of why Ukraine cannot void the contract using the same rationale asserted by the Russians when they cut the gas.

Then there is the matter of diversified supplies, which Ukraine enjoys, though much of Europe does not:


In 2005, Ukraine imported 25 billion cubic meters of natural gas from Russia, 38 billion cubic meters from Turkmenistan, and extracted 18 billion cubic meters internally.

Now, a quick look at a map will point out that Turkmeni gas has to pass through the Russian network in order to get to Ukraine. A listing of Route options, existing and planned details that Turkmenistan uses the Central Asia-Center Pipeline system to connect to the Russian grid at Saratov and "is using this pipeline to export a total of 8.83 Tcf to Ukraine (via Russia) from 2002 to 2006, as well as smaller amounts to Russia."

The Russians, if inclined, could cut that supply off as well, though at the price of forcing a confrontation with the United States.

However, Russia and China are staunch allies. One of the now five year-old Shanghai Cooperation Organization's goals is to maintain strategic control over the energy reserves of Central Asia, as opposed to letting a non-Asian power (read: the United States or Europe) enjoy that role. Getting access to this energy is the main reason why India has been flirting with membership in SCO, and mending fences and making new friends -- with Pakistan and Iran, respectively.

Have Keyboard. Will Travel. :)

by cskendrick (cs ke nd ri c k @h ot m ail dot c om) on Mon Jan 2nd, 2006 at 08:25:54 AM EST
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