Ukraine - Russia - RosUkrEnergo on the Brink of a Gas Crisis?

Glamorous, tough Yulia Tymoshenko, the so called Ice Queen of Ukraine's Orange Revolution is, after a lot of horse wrangling once again Ukraine's prime Minister at the head of an "Orange" coalition. There has been 3 months of political paralysis in Kiev (which even kept Dubya from calling last week) that she and President Viktor Yushchenko reached some form of deal. He will present the Tymoshenko nomination to parliament on Monday.

Politics is a rough tough business in this part of the world, Viktor Savkin a Ukraine MP and member of the Tymoshenko bloc, was shot dead in front of his 13-year-old daughter in Yalta last Saturday, on Friday, Grigory Potilchak of Yulia Tymoshenko’s party was shot four times and killed in the street in the Ukrainian town of Nezhin.

Hitting the ground running she has immediately raised the natural gas import deal the Ukraine signed with Russian oil giant Gazprom. On Ukraine TV she announced, "I think all agreements on gas supplies to Ukraine need a further profound revision,"

Simultaneously Turkmenistan has proposed raising the gas price it sells to Gazprom, from $65 per 1,000 cubic meters at present to $100 in the second half of 2006 which holds potentially momentous implications for Ukraine. This could signal the end of the murky RosUkrEnergo gas deal that was made at the expense of Turkmenistan.

This will of course have wide and troubling ramifications outside the Ukraine through which much of Europe's gas supply flows on its way west. Ukraine ended the crisis by agreeing a deal, which almost doubled the price Ukraine paid for gas from $50 per 1,000 cubic meters of gas to $95. Ukrainians were faced with 40% price rises, another of 85% is due with more promised next year. (Spontaneous) Demonstrations are being organised to protest on Tuesday.

Having agreed the deal the Ukraine have been falling behind on payments to Gazprom.

“Yulia Tymoshenko’s statement regarding review of the gas agreement with Russia is yet another warning bell for Europe… Realization of threats that were made in Ukraine today will pave a road to a new gas crisis. We believe that Yulia Tymoshenko’s words once again prove the thesis that Ukraine is unfortunately a weak link in the chain of Russian gas deliveries to Europe,” said Gazprom’s official representative Sergei Kupryanov on State Russian TV.

It promises to be a long cold winter again.... and not only in the Ukraine... it also highlights the problems that the UK faces in relying so heavily on imported gas in the next decades for power generation.

For helpful information about RosUkEnergo (RUE) go here and learn about this mysterious organisation and it's role in supplying gas to the Ukraine.