Russia demands payment for next month's gas on June 2: Russian media

[dipsydoodle]

Source: Reuters

(Reuters) - Russian state-controlled gas company Gazprom has reiterated its threat to stop supplying Ukraine with gas if it does not pay in advance for June deliveries, Russian news agencies reported on Monday.

Gazprom CEO Alexei Miller said Gazprom will present Ukraine's state energy company Naftogaz with a bill for June on Tuesday, demanding payment by June 2, the reports said.

"If Ukraine does not pay for June supplies, Gazprom will, by 10am (0600 GMT) on June 3, inform the Ukrainian side what amount of gas will be supplied in accordance with the pre-payment," Itar-Tass quoted Miller as saying.

He said the amount of gas to be supplied would be zero if no payment is made.

Read more: http://www.reuters.com/article/2014/05/12/us-ukraine-crisis-russia-gazprom-idUSBREA4B0JL20140512

[Ash_F]

1. So what does that mean for the daily lives of Ukrainians?

Are we talking 1970s US economic collapse, or outright famine?

[dipsydoodle]

4. Most of what will affect the daily lives of Ukrainians will be IMF's austerity measures

which Yanukovych had rejected twice in the past. That's not a defense of him - just a fact of life which is easy to search.

Most material affect aside from factory production would be the need for warmth. Never mind - still 7 months to go before next winter sets in there. It goes almost without saying that early days they would most likely "borrow" from the EU's reserves.

I recall falling into the trap of thinking they could burn wood or coal - can't do that in an apartment block which uses a central boiler.

[freshwest]

2. This could have a terrible impact on Ukraine's economy. Even on the sectors that produce weaponry

for Russia itself, which IIRC, the Russians are removing their machinery from Ukraine.

Suspect they'll come to agreement, although leaving that $3.5B in arrears hanging out there can't be good for either nation.

Ukraine and all countries need to diversify their energy sources to prevent destabilization from other nations or interests.

[dipsydoodle]

5. EU energy minister has already told them

"the debt to Gazprom is to be paid"

It may be that promised IMF and EU funds are partly designated for that actual purpose.

Aside from Russia having said it would take 2 years to move all arms production elsewhere they'd made no mention of moving the plant and machinery. I hadn't considered that aspect which would make the move more or less irreversible.

[freshwest]

7. Could be right on the funding. But no gas, the manufacturing will shut down. I guess that is a large

reason some in the east of Ukraine want to join Russia, to keep closer to their paycheck. It's about the jobs.

We've seen in American labor history that bosses hire people to terrorize or kill others as they want the status quo to remain for themselves. At this time, the status quo is maintaining a place in Russia's MIC.

For those wanting to exit Ukraine, nationality may not matter. Those jobs are their livelihood, and the west gets weapons from the USA and other allies. They may not want what Ukraine is selling to Russia, thus they see poverty coming.

When you take it down to that level, all the other words and stories being bandied about are not what it's really about. Just my humble opinion.

[Purveyor]

3. Pay your bills Ukraine and you'll have gas. If I don't pay my gas bill, guess what?

Shocker here: It gets shut off.

[joshcryer]

6. They will pay their extortionists.

You may or may not be happy paying a bill when someone else used it then overcharged.

But, then, you wouldn't be incompetent enough to allow for significant theft, you would catch it.

[dipsydoodle]

8. Ukraine needs to pay $1.66 billion for gas deliveries in June: Gazprom

(Reuters) - Russia's Gazprom (GAZP.MM) has notified Ukraine's Naftogaz about its pre-payment conditions for June based on contractual gas supplies of 114 million cubic meters per day, or 3.4 billion cubic meters for the month in total.

"Taking into an account non-working days, Naftogaz should pay this bill by June 2 and, starting from June 3, the company will be getting gas ... only at the volumes paid for," Gazprom spokesman Sergei Kupriyanov said in a statement on Tuesday.

He said Ukraine needed to pay $1.658 billion for June's expected gas deliveries based on a price of $485 per 1,000 cubic meters. Naftogaz declined to comment.

http://www.reuters.com/article/2014/05/13/us-ukraine-crisis-gas-supply-idUSBREA4C07L20140513

[dipsydoodle]

9. Ukraine needs more gas to avoid problems in winter - Russia's Gazprom

(Reuters) - Ukraine needs a total of 18.5 billion cubic metres of gas in storage to avoid problems in winter, double what it has now, Gazprom Deputy Chief Executive Vitaly Markelov said on Tuesday.

Moscow and Kiev are on the cusp of another gas war after Kiev has refused to pay at higher levels demanded by Gazprom. The Russian company is now asking for prepayment for June and says it will only provide gas that is paid for.

"According to our colleagues (in Ukraine), 9 bcm is in storage. To pass through autumn and winter periods normally, we estimate that (Ukraine) needs around 18.5 bcm (in total)," Markelov told a news conference.

"So around 9 bcm more is needed."

http://uk.reuters.com/article/2014/05/13/us-ukraine-crisis-gas-idUKKBN0DT0JZ20140513

[quadrature]

10. what is wrong with these people? price of NG

help... please comment....

look at the math.
price of wholesale NG in Henry Louisiana
is USD 4.42 per million btu, which is 1000
cubic feet, give or take a few percent.

a cubic meter is 35.3 cubic feet.

Putin charges USD 485 per 1000 cubic meters, or
USD 13.73 per 1000 cubic feet

[dipsydoodle]

11. You cannot necessarily compare US prices

with anything outside the USA.

[quadrature]

12. your point is well taken...

but I did compare prices, and
In my opinion,
people buying NG from Putin are imbeciles.
especially that nut woman in Germany
who thinks it is a good idea to turn off
already-paid-for nuke plants and buy more
NG.

[dipsydoodle]

13. The spot market price for LPG in Europe is generally in the order of $400 / 1000 cu. meters.

The average price which EU members pay on their Gazprom contracts seems to be c. $385. Some of those contracts have minimum volumes built in too. I don't know if there are differentials between gas supplied via Ukraine and gas supplied via Nord Stream.

Lowest price I've seen for supplies are those to Armenia which are priced at $189 . There are background reasons for that and part of the price reduction is a subsidy related to waiving duty payments from Gazrom to the Russian government.

[quadrature]

14. excellent info...thanks for posting...nt

[dipsydoodle]

15. Part of EU macro-financial assistance to Ukraine may be used to pay its gas debt - EU Commission

Ukraine can use part of the macro-financial assistance provided by the European Commission to pay off the country's debts for natural gas.

"This is support for the Ukrainian budget with a view to enabling Ukraine to meet its external funding requirements. This includes payment requirements in the energy sector. This is therefore support that is aimed at the Ukrainian budget," a spokesman for European Economic and Monetary Affairs Commissioner Olli Rehn, Simon O'Connor, said in Brussels on Tuesday.

When asked if this means that Ukraine can use these funds to pay off its gas debt, he said: "Yes, this is part of Ukrainian external financing requirements."

O'Connor noted that the documents on the allocation of the macro-financial assistance to Ukraine will be signed on Tuesday, May 13, during the visit of the Ukrainian government.

http://en.interfax.com.ua/news/economic/204626.html