Ukraine blocks Russian gas

After talks between Ukraine and Russia on the purchase of Russian natural gas from Ukraine collapsed, Ukraine announced its government would suspend further procurement of the energy source from Russia.  Despite the interruption, Ukraine’s state-owned energy company, Naftogaz, announced they would remain committed to supplying gas supplies to European customers.

A statement from Naftogaz read:

“Since the additional agreement between Naftogaz and Gazprom is expiring on 30 June, and the terms of further Russian gas deliveries to Ukraine were not agreed at today’s trilateral talks in Vienna, Naftogaz is suspending purchases from the Russian company.”

Russian Energy Minister, Alexander Novak, described Ukraine’s decision to decline further gas purchases as “unfortunate.”

Since hostilities in Ukraine began over one year ago, the European Union (EU) has brokered short-term compacts between the two nations which extend no further than six months.  Trilateral talks negotiated in Vienna buckled on Tuesday and Ukraine announced the suspension short time later.

Although Moscow elevated gas prices in response to the ouster of Viktor Yanukovych in February 2014 and cut supplies altogether in June 2014, this is the first time Ukraine has declined further purchases.

Ukraine produces 20 billion cubic meters of natural gas a year; nonetheless, it requires an additional 30 billion cubic meters yearly.

It gets awfully cold in Ukraine, and much earlier than the rest of the world.  The Ukrainian government may want to re-consider Russia’s offer.