Russia and Ukraine edge closer to ‘gas war’

The possibility of a new “gas war” between Russia and Ukraine inched closer on Tuesday, as the Russian state energy giant Gazprom complained that Kiev had outstanding debts of over half a billion pounds and demanded swift payment.

Gazprom’s concern comes a month before Ukraine is due to sign up for closer ties with the European Union, a deal that has infuriated the Kremlin.

The complaint brought back memories of crises in 2006 and 2009 in which Russia turned off the gas to Ukraine, leaving many European nations that rely on pipelines passing through the country without energy in the middle of winter.

Russia wants Ukraine to join its own Customs Union of former Soviet states, and has repeatedly sent dire warnings that by signing the deal with Europe, Ukraine will lose billions of dollars and face myriad problems. One Kremlin economic adviser even predicted that if the deal is signed “political and social unrest” will ensue and Russia could cease to recognise Ukraine’s status as a sovereign state.

…

Gas prices are a controversial issue in Ukraine, with the prime minister, Mykola Azarov, recently claiming that the country has overpaid by over $20bn over the past three years for Russian gas.

Former premier Yulia Tymoshenko was jailed for seven years in 2011 on charges of abuse of office, related to a gas deal she brokered with Russia in 2009 when she was prime minister. The current government says the deal forced cash-strapped Ukraine into paying unfairly high prices for gas.

…

Ukraine is due to sign the association agreement on closer trade links with the EU at a summit in the Lithuanian capital Vilnius on 29 November, but European leaders have said several times that the deal will be possible only if Ukraine’s president, Viktor Yanukovych agrees to release Tymoshenko from custody.

She is currently being held in a hospital in eastern Ukraine under prison guard. The case against her has been widely denounced as politically motivated.

Full article: Russia and Ukraine edge closer to ‘gas war’ (The Guardian)