Naftogaz Warns Europe of Gas Disruption Risks

Mixed signals on Ukraine indicate that the risk is there to stay, with Norwegian sanctions on Moscow kicking in and Ukraine warning Europe of possible gas disruptions. Meanwhile, Russia’s stocks rose for a fourth day, led by Gazprom and Lukoil. 

Price volatility is a very likely scenario. The above mentioned mixed signals do indeed corroborate the scenario of oscillating gas prices. As said a few days ago, this is already happening.  

NAFTOGAZ WARNS  

It comes as little surprise that Ukraine’s Naftogaz said on Wednesday European companies could bear the brunt of the gas pricing row. 

"The company notes that the current situation can not be considered as stable. This situation can lead to a repetition of the gas crisis of 2009, when Gazprom stopped gas transit to Europe," Naftogaz wrote on its website. 

Naftogaz argued that the adoption of the Ukrainian sanctions on Russia does not automatically imply sanctions. According to the company, the law simply creates a legal basis for their application. However, risks remain. 

‘Naftogaz Ukraine" feels obliged to notify the European partners of risks and proposes to solve the problem of joint efforts by tripartite negotiations in the Ukraine - EU - Russia.’ 

EU - UKRAINE TIES 

The relations between Kiev and Moscow are further complicated by the progressively strong ties between Ukraine and Brussels. The troubled country is supposed to implement the EU Third Energy Package in 2015. 

In a separate note, Ukrtransgas said it completed activities to ensure the technical possibility of receiving natural gas from the Slovak Republic. 

On Tuesday, Andriy Kobolyev, Chief Executive Officer of NJSC Naftogaz of Ukraine, told Bloomberg that Ukrainian sanctions may force EU to buy gas at Russian border.