Saturday, October 18, 2014

Russia and Ukraine Situation Updates ( October 17 - 19 , 2014 ) Ukraine seeks donor confernece in January 2015 to pay its expenses .....Demobilization in face of draft evasion and protests seems likely...... Russia , Europe and Ukraine continue battle of wills regarding natural gas talks ( Europe nervously checking the calendar as November approaches , - can Draghi OMT " heat " ? ) ... Kremlin pranks Poland by expressing wonderment it won't provide Ukraine with free coal ....

Yatsenyuk: Ukraine has $3.1 bln that can be used to pay for gas

 October 19, 22:22 UTC+4
Ukrainian Prime Minister also said that as of the morning of October 19 Ukraine’s gas storage facilities held 16.7 billion cubic metres of gas
KIEV, October 19. /TASS/. Ukraine has 3.1 billion U.S. dollars on its accounts and can use this money to pay for gas, Ukrainian Prime Minister Arseniy Yatsenyuk said on Sunday.
“We now have 3.1 billion U.S. dollars on accounts. This money can be used to pay for gas - for both previous and future supplies, as we will agree,” Yatsenyuk told the ICTV television channel.
He also said that as of the morning of October 19 Ukraine’s gas storage facilities held 16.7 billion cubic metres of gas.

Donor Conference to Take Place in Kiev in January 2015: Ukraine’s Government

According to the Ukrainian Government, a so-called donor and investors conference on Ukraine's financial issues, organized by the European Union will take place in Kiev in the end of January 2015
14:52 19/10/2014
Tags: conferenceinvestorsdefaultEUukraine
KIEV, October 19 (RIA Novosti) - A so-called donor and investors conference on Ukraine's financial issues, organized by the European Union will take place in Kiev in the end of January 2015, a source from Ukraine’s government told RIA Novosti on Sunday.
“We have determined that the conference will take place in the end of January. According to preliminary agreement, it will be held in Kiev,” a source said.
As a result of the ongoing political crisis in the country, Ukraine is currently on the verge of a default. Kiev authorities are trying to rescue the country's economy with international loans, including a $17 billion loan from the International Monetary Fund.
Kiev also has a significant gas debt that its gas company Naftogaz owes to Russian energy giant Gazprom, which is estimated to stand at over $5 billion.
The military operation initiated by Kiev authorities in mid-April to suppress independence supporters in eastern Ukraine claimed the lives of 3,700 people and left over 8,800 injured. Due to the conflict, Ukraine's southeastern regions have witnessed a severe humanitarian catastrophe, with many citizens still struggling without clean water, electricity and other basic necessities.
Country’s eastern regions require huge investments for reconstruction and the restoration of infrastructure.

Poroshenko: Ukraine to Demobilize Conscripts Who Want to Serve on Contract Basis

Poroshenko said he was going to sign a demobilization decree that would allow conscript soldiers to opt for volunteer military
02:39 19/10/2014
Tags: armyDemobilizationUkraine
KIEV, October 19 (RIA Novosti) - Ukrainian President Petro Poroshenko announced Saturday he was going to sign a demobilization decree next week that would allow conscript soldiers to opt for volunteer military.
“I have prepared a decree – to be issued next week – that will demobilize all those who want to serve on contract. What for? Because it’s only fair to serve in the army and earn more,” Poroshenko said during an interview with several TV channels.
This came after hundreds of Ukrainian servicemen rallied on Monday outside the presidential administration building in downtown Kiev to demand that they be sent home.
The Ukrainian authorities have conducted three waves of army mobilization after a conflict broke out in the country’s east. The government later admitted it was dealing with multiple cases of draft evasion.
In mid-April, Kiev launched a military operation against independence supporters in Ukraine’s eastern Luhansk and Donetsk regions. The United Nations estimates that some 3,700 people have been killed and over 8,800 have been wounded since the start of the crackdown.

Russia Today....

Kremlin surprised Poland won’t give Ukraine free coal

Published time: October 17, 2014 13:53
Reuters / Gleb Garanich
Reuters / Gleb Garanich
Now that Ukraine wants to receive Polish coal, and not Russian gas, free of charge, the Kremlin said it is surprised at Warsaw’s inconsistency towards Ukraine’s energy crisis.
“Our Polish partners have reacted in such a lively way to news of Ukraine wanting to get Polish coal almost free of charge,” Dmitry Peskov, the spokesman of Russian President Vladimir Putin, said. The Russian President was in Milan Friday with European and Asian leaders at the ASEM summit.
Peskov sees a major inconsistency in Warsaw’s attitude towards Ukraine in terms of which resources can be obtained for free and which cannot. The aide told Poland it shouldn’t be surprised that Ukraine wants to receive coal without paying, since Poland thinks that giving Ukraine Russian gas for free is fair.
On Thursday, Poland’s Deputy Prime Minister Janusz Pehochinsky expressed disappointment that Ukraine hasn’t yet paid for 100,000 tons of Polish coal.
Poland said it will provide Ukraine with coal as it faces an energy pinch in the lead up to winter. Poland has 10 million tons of unsold coal, which Warsaw blames on a flood of Russian imports.
Ukraine is one of world’s top coal consumers, and home to the 7th largest reserves. However, coal production in Ukraine has suffered as a result of war in the Donbass region, where 90 percent of the country’s coal mines are located. Most have closed down because of the fighting.
According to Peskov, Thursday’s report from Poland has shed light on the gas conflict between Russia and Ukraine.
“This is the best illustration of what’s going on in the gas sphere. The Poles were greatly impressed and did not conceal their shock. But still they can fully understand the desire to have gas free of charge.”
The “free gas” Peskov is talking about is the over 11.5 billion cubic meters of Russian gas Ukraine has imported, but not paid for.
In June, Gazprom switched off gas to Ukraine after Kiev refused to pay off its $5.3 billion debt or agree to price negotiations. In 2013 Ukraine used 50 billion cubic meters of gas to heat its homes and factories.
More gas discussions are to follow, as Russian Energy Minister Aleksandr Novak and the head of Gazprom Aleksey Miller are part of the Russian delegation currently in Italy for talks.

Gas Talks.....

Russia Today....

Putin says gas deal with Ukraine for winter months only, Poroshenko says no deal at all

Published time: October 17, 2014 13:19
Edited time: October 17, 2014 17:04

Russia's President Vladimir Putin (L) stands with German Chancellor Angela Merkel (C) and Ukraine's President Petro Poroshenko (R) as Italy's Prime Minister Matteo Renzi stands on the back during a meeting on the sidelines of a Europe-Asia summit (ASEM) in Milan October 17, 2014 (Reuters / Daniel Dal Zennaro)
Russia's President Vladimir Putin (L) stands with German Chancellor Angela Merkel (C) and Ukraine's President Petro Poroshenko (R) as Italy's Prime Minister Matteo Renzi stands on the back during a meeting on the sidelines of a Europe-Asia summit (ASEM) in Milan October 17, 2014 (Reuters / Daniel Dal Zennaro)
Kiev and Moscow have failed to resolve their gas supplies dispute, Ukrainian President Petro Poroshenko said after meeting Russia’s leader. According to Putin, only an agreement for winter supplies has been reached, but details are still to be worked out.
“We agreed on the basic parameters of the gas contract,” Poroshenko told reporters in Milan where leaders from Europe and Asia gathered for the ASEM Summit. According to the Ukrainian president, the Ukrainian side is looking for sources of funding to pay off the arrears.
The optimistic statement came after Poroshenko met with Russian Energy Minister Aleksandr Novak and the head of Gazprom Aleksey Miller.
But emerging from a meeting Russia’s President Vladimir Putin later in the day, the Ukrainian leader said that no agreement had been reached. New talks have been scheduled for October 21; the EU is once again set to mediate the process.
We have failed to reach any practical results,” Poroshenko told reporters after a 45-minute meeting with Putin. He noted that “some progress” in the dispute but said that details are yet to be worked out.

No more credit-based gas to Ukraine - Russia

Vladimir Putin, on his behalf, stated the two countries agreed on terms of gas supplies “at least for the winter period”.
"The current issue is cash deficit in Ukraine," Putin said, calling on Western partners to help Kiev overcome the crisis.
Russia is not ready to supply gas to its eastern neighbor without pre-payment. He said that Kiev still owes Moscow some $5.5 billion, but is ready to reconsider this sum and a provide a discount of $100 per one thousand cubic meters. This will reduce the debt to $4.5 billion.

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Putin: Russia will not supply gas to on credit, that is final 

At the last round of gas talks held in Berlin along with EU energy commissioner Gunther Oettinger, it was agreed that Ukraine would start paying back Gazprom $2billion of its $5.3 million debt, and Russia would turn back on supplies.
So far no further detail has been provided, but trilateral talks between Russia, the EU, and Ukraine will again be held on October 21 in Brussels.

Trilateral talks between , & on October 21 will take place in , not in Berlin: 

The gas price and payment schedule have been key stumbling blocks in the dispute.
Russia offered $385 per 1,000 cubic meters of gas, less than the $400 average for European clients, but Kiev argues the price is too high, and wants to set it at $285 per 1,000 cubic meters.
Europe counts on Russian natural gas to meet about one third of its energy needs, and 50 percent of the gas travels through Ukraine. If Moscow cuts off deliveries via Ukraine, 15 percent of Europe’s gas will be at risk.
Moscow will supply enough gas to Europe this winter, but says Ukraine remains a wildcard. If Kiev siphons off gas intended for European customers, Moscow will be forced to reduce gas supplies.

Winter warning

Russia turned off the gas to Europe via Ukraine in 2006 and in 2009, over similar pricing disputes with Kiev. A prolonged supply disruption would have a substantial impact on the EU, the European Commission warned on Thursday.
Latvia, Lithuania, Estonia, Finland, Bulgaria and the Czech Republic import 100 percent of their natural gas from Russia and would be affected most by a cut in supply, as they would be without at least 60 percent of the gas they need keep the heat on.
“This means that even private households could be left out in the cold. If countries work together, instead of adopting purely national measures, then fewer consumers will be cut off from the gas,” the EU statement said.
Ukraine has already been preparing for shortages in central heating, with some stocking up on dirtier energy sources like wood and coal, just in case they have to survive the winter without gas.

RIA Novosti....

Russia, Ukraine Discuss Debts Repayment Ahead of New Gas Talks: Energy Ministry

Topic: Russia-Ukraine Gas Conflict

Ukraine is not only facing a gas crisis this coming winter, but also a possible overall energy crisis due to disruptions in coal mining and transportation facilities
09:02 18/10/2014
Tags: paymentdebtgasASEMUkraineRussia
MOSCOW, October 18 (RIA Novosti) - Russia and Ukraine have reached a preliminary agreement on Ukraine's repayment of debts in order to come to compromise at Russia-Ukraine-EU gas talks scheduled for October 21, Russia's Energy Ministry announced.
"Ukraine takes on an obligation to pay $1.45 billion for the repayment of the existing debt by the end of October, and to pay $1.65 billion more by the end of 2014. Moreover, the parties have agreed on the temporary price of $385 for 1,000 cubic meters, which will be used for the deliveries in winter season on a pre-paid basis. In order to buy gas on a pre-paid basis, Ukraine together with the European Commission should search for the financial resources of $1.6 billion by the end of the year as a bridge loan or as a guarantee of the top rank financial institutions," the ministry stated Friday.
The agreed parameters will be further discussed at the gas talks between Russia, Ukraine and Europe in Brussels on October 21.
The leaders of Russia, Ukraine, Germany and France, as well as Russian Energy Minister Alexander Novak took part in the talks on the sidelines of the Asia-Europe Meeting (ASEM) summit in Milan discussing gas issues. The main topics were the repayment of debts by Ukraine and the security of gas transit through Ukraine's territory.
Ukraine is now facing the approaching winter with low natural gas reserves. In June, Russian energy giant Gazprom switched Ukraine to the prepayment system for gas supplies in light of Ukraine's more than $5 billion gas debt.
In September, during ministerial talks in Berlin, Russia and the European Commission proposed the so-called winter package, envisaging Ukraine paying $3.1 billion of its debt by the end of 2014 in exchange for winter gas deliveries. Russia also insisted that Ukraine pay the first tranche of $2 billion before the start of the deliveries.
On October 13, Russia said it was ready to offer Ukraine a more flexible schedule for the debt repayment, according to which Kiev should pay $1.45 billion in the first installment of $3.1 billion, with the rest of the debt to be paid by the year-end. However, Ukraine refused to make any advanced payment for Russian gas supplies, insisting that payments be made upon delivery.

Strange Liaisons? Putin Visits Berlusconi's Home At 3am After Warning Merkel Of Gas Squeeze

Tyler Durden's picture

It appears Bunga-Bunga boy still has something to offer the international elite. After a lengthy meeting with Germany's Angela Merkel (at a hotel in Milan) where Putin warned of "big transit risks" in delivery of Europe's gas as Ukraine is "starting to siphon off our gas from the export pipeline," and threatening to respond by "reducing flows by the amount stolen;" Putin decided the place to be was 78-year-old Berlusconi's house at 3am. Finally, it is worth noting that Ukraine's President Poroshenko was scheduled to meet with Frau Merkel this morning - we assume to plead his case for why gas transit should flow through his nation (and beg for some more support).

Russian President Vladimir Putin flew into Milan last night for peace talks with European Union leaders after threatening to cut the supply of natural gas through Ukraine if the government in Kiev diverts fuel for domestic use.


“There are big transit risks,” Putin, who denies involvement in the Ukrainian conflict, said yesterday in Belgrade, Serbia. If Russia sees its Ukrainian partners “are starting to siphon off our gas from the export pipeline network, we will respond by reducing flows by the amount stolen.”
Russian President Vladimir Putin perhaps couldn’t resist an invite from his Italian chum, former Premier Silvio Berlusconi, in the early hours of Friday to his mansion in Milan.


A Russian presidential spokesman said Mr. Putin visited “his old friend” Mr. Berlusconi following an invite from the Italian politician. Mr. Berlusconi heads Italy’s biggest opposition party.

President Putin, 62, must have felt the need to relax after his meeting with Ms. Merkel at 1.36 a.m. CET on Friday. He drove off with a large police escort, which included dark limousines, to Mr. Berlusconi’s house and stayed there until roughly 3 a.m.
*  *  *
Strange Liaisons indeed...


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