Gas Dispute Gets from Bad to Worse
14/1/2009“The bitter gas dispute between Russia and Ukraine descended into near-chaos on Tuesday, leaving European Union diplomats baffled as promises to restart supplies fully were broken and Moscow suggested that the US had meddled in the affair”, a report by the Financial Times says on Tuesday.
The point is: never before in history had Europe faced such a serious gas security crisis.
A couple of key-issues:
- “The Russians have accused the Ukrainians of taking what is called the ‘technical’ gas out of the pipelines as well, which is the amount of gas needed to sort of get things flowing”;
- Because Ukraine and Russia still haven’t found a new bilateral agreement on supply price and debt, Kiev could be forced to siphon off gas again in a few weeks, once its reserves will inevitably end.
This spells problems for Europe. Immediate diversification is possible only via liquified natural gas (LNG) for countries who have both a coastline and the necessary infrastructures, as Prof. Johathan Stern explained yesterday in an interview with the Financial Times.
On the longer term, Europe should be working on new routes that transport natural gas from Northern Africa, the Middle East, and the southern Caspian Basin to Europe, if it is to avoid new dangerous episodes such as the ongoing crisis.
