Thursday, July 24, 2014
 
Follow sptimesonline on Facebook Follow sptimesonline on Twitter Follow sptimesonline on RSS
MOST READ



PARTNER NEWS



BLOGS



OPINION



WHERE TO GO?

The Romanovs in St. Petersburg

History of St. Petersburg Museum

Small Tragedy, Fatal Passion

Rimsky-Korsakov Apartment Museum

 

  Print this article Print this article

Gazprom Is Unlikely to Yield on Ukraine

Published: November 14, 2012 (Issue # 1735)



  • Several EU nations have procured discounts but Ukraine lacks political leverage.
    Photo: MAXIM STULOV / VEDOMOSTI

MOSCOW Gazprom may have agreed tocut prices formany ofits European customers, but thechances ofits biggest foreign market, Ukraine, getting adiscount appear slim, according toan analyst report.

Perhaps Gazprom cannot afford yet another price cut when its revenues andnet profits are under such strain, Andrew Neff, aRussia analyst forIHS Energy, said last week.

Inthe latest concession, Gazprom agreed last week toshave 10 percent off theprice that it charges Polish gas importer, PGNiG. Germany andItaly had won similar discounts inpast months onthe backdrop ofincreased scrutiny bythe European Commission ofGazproms business inEurope.

Not amember ofthe EU, Ukraine doesnt enjoy thepolitical backing ofthe bloc, andit doesnt have analternative source forits huge gas imports, Neff said inthe research note.

Ukraines current political leaders bear part ofthe blame forthe price impasse with Russia, thenote said.

Ukrainian policymakers also can point thefinger squarely inthe mirror fortheir current predicament, Neff wrote.

After President Viktor Yanukovich came topower inUkraine, thecountry made amajor strategic error when it didnt tear up thecurrent contract with Gazprom containing what Neff called aninflated base price, thenote said. Instead, Yanukovich secured adiscount forUkraines national energy company Naftogaz inexchange forextending theRussian lease ofthe Sevastopol naval base.

Not only has Russia argued since that time that Gazprom already has granted Naftogaz aprice discount but that accord set expectations onthe Russian side that any concessions byGazprom would be matched byconcessions byNaftogaz and/or theUkrainian government as well, Neff wrote.

Thus, Russia has dangled thepossibility oflower gas prices forUkraine if it joins aRussia-led customs union anoffer that Ukraine has resisted so far.

Gazproms European customers have wrangled lower prices andretroactive discounts fromthe Russian export monopoly bythreatening or, inPGNiGs case, actually launching arbitration proceedings. But Ukraine didnt cross that line, Neff noted.

Ukrainian President Yanukovich avoids araucous legal standoff because his voter base is loyal toRussia, said Volodymyr Fesenko, director ofthe Penta political studies center inKiev. TheUkrainian government is also afraid oflosing that battle, he added.

Kiev damaged its odds ofgaining theupper hand inthe price dispute byalienating theEuropean Union political establishment, which criticized theprosecution andimprisonment ofUkraines former prime minister Yulia Tymoshenko as politically motivated, Fesenko said.

Ukraine has chosen thepath ofincreasing its own production ofgas aneffort that will not bear fruit any time soon, he said. Even so, significant progress onthis could over time compel Gazprom toreconsider its adamant approach todealing with Ukraine, Fesenko said.





 


ALL ABOUT TOWN

Thursday, July 24


Liliana Modiliani, a well-known Russian stylist, will talk about choosing clothes that fit during her lecture at 7 p.m. at the Pryamoy Efir art club, 13 Viborgskoe Shosse.



Friday, July 25


Discuss Russias economic and political prospects for 2014 during a Business Breakfast organized by SPIBA at 9.30 a.m. in the Bank Saint-Petersburg office at 64


Malookhtinsky Prospekt.


Start your weekend with adorable miniature pigs at the Squealing Pig festival at 7 p.m. this evening in the Karl & Friedrich restaurant, 15 Iozhnaya doroga, on Krestovsky Island.



Saturday, July 26


Hundreds of brand-new and retro cars, drag and drift shows, test drives and karting are planned for the Avtobum-2014 festival, which will take place in front of the RIO shopping center at 2 Fuchika Ulitsa.


Participants in todays SaniDay Summer competition will impress visitors with their hand-made, unusual and hilarious boats, which will race at the Igora Resort near the 54th kilometer on Priozerskoe Shosse.


Metro Family Day will include both serious lectures for adults and master-classes for children, making the event interesting for the whole family. To participate, come to Kirov Park on Yelagin Island.


Photography will be the focus of todays Photosubbota, which features lectures by famous photographers, meetings with photo schools and studio representatives, and participation in a photography competition. The event starts at noon at Petrokongress, 5 Lodeynopolskaya Ulitsa.


If you like cycling, make sure to visit the Za Velogorod Festival with its retro bike exhibition, market and live music. The second round of the Leningrad Criterium race will also take place during the event at Petrovsky Arsenal in Sestroretsk.



Sunday, July 27


Navy Day will be celebrated with a weapon and military transportation exhibition, self-defense master classes and concerts. The event starts at 1 p.m. in the 300th Anniversary Park of St. Petersburg.



Monday, July 28


Dont miss a chance to see the latest achievements in robotics during the RoboDom interactive show, exhibiting more than 150 robots. The show will be at BUM center, 22/2 Gzhatskaya Ulitsa, until Aug. 3. The entrance ticket costs 350 rubles ($10).



Tuesday, July 29


A video of a Queen concert from 1986 will be shown today at 8 p.m. in Yaschik, 50/13 Ligovsky Prospekt.



Times Talk