Ukraine-Russia Relations Heat Up as Russian President Orders Maximum Capacity for South Stream
Energy relations between Russia and Ukraine, already stressed by recent difficulties in a cold snap, have detoriorated further as Russian President Dmitry Medvedev has ordered Gazprom to build the South Stream pipeline project to its maximum capacity of 63 billion cubic metres to ensure flexibility of supply in future.
Speaking at a meeting with chairman of Gazprom's Management Committee Alexey Miller yesterday, President Medvedev said that the maximum capacity of South Stream should be used in consideration of gas transit via Ukraine.
The order came in response to statements by Mr. Miller during the meeting, again alleging that Ukraine had taken more than its fair share of gas during a recent cold snap, an accusation that Ukraine has furiously denied.
"On some days, up to 40 million cubic metres of gas were stuck in Ukraine," the CEO said. "No doubt that it inflicted both financial and reputational damage on Gazprom. Meanwhile, there is no efficient mechanism to control the behaviour of Naftogaz Ukrainy in such a situation."
The statement echoes the sentiments of one made to Bloomberg yesterday by Gazprom spokesperson, Sergey Kupriyanov which implies that Ukraine will not be a part of gas transit for Gazprom in the future.
"South Stream to full capacity, Nord Stream with additional lines and our existing capacity through Belarus and the Black Sea will reduce Ukraine’s importance for transit to zero," the emailed statement said.
The statement is further fuel to the growing hostilities arising between Gazprom and Ukraine since negotiations began.
Security
During the meeting, Mr. Miller told the president that the South Stream project was essential to ensuring security of gas supply to Europe -- a concern that was highlighted with the recent cold weather.
"It is a very timely project," he said. "Besides the evident growth in gas transit reliability, it will considerably enhance our capabilities to flexibly adapt to changes of demand for energy carriers in Europe. It is an important factor of Russian gas competitiveness in European markets."
President Medvedev ordered Gazprom to continue negotiating with Ukraine.