Gazprom Says Ukraine Lacks Enough Gas to Ensure EU Supply

OAO Gazprom (GAZP), Russia’s natural-gas export monopoly, said neighboring Ukraine has insufficient stockpiles of the fuel to meet its own demand and ensure supply to Europe this winter.

“It’s a catastrophe,” Deputy Chief Executive Officer Vitaliy Markelov said in an e-mailed statement. “In these conditions, the winter transit of Russian gas won’t be possible because storage won’t be enough to compensate for Ukrainian consumer drawdowns.”

Russian gas supplies to Europe, comprising about a quarter of the region’s demand, have been halted several times in the past decade amid disputes over price and transit arrangements with Ukraine. Relations between the two nations may deteriorate further should Ukraine sign a free-trade agreement with the European Union this month, snubbing a customs union with Russia.

Ukraine has begun to dip into winter storage, reducing gas levels to 17.6 billion cubic meters, when 21.5 billion cubic meters are needed at the start of winter, Markelov said. The current rate of withdrawal will drain storage to 14 billion cubic meters by the time Ukraine’s cold weather takes hold, he said.

Olena Yuriyeva, a spokeswoman for Ukraine’s state-run energy company NAK Naftogaz Ukrainy, didn’t answer her mobile phone when called after business hours. Oleksandr Kolodiy, a spokesman for Deputy Prime Minister Yuriy Boyko, responsible for energy policy, wasn’t able to comment immediately.

Russia’s former Soviet neighbor needs gas not only for its own consumption and to deliver to Europe, but to fuel the pumping stations that send the gas.

Ukraine stopped importing Russian gas earlier this month after fulfilling a plan to buy 18 billion cubic meters for the year, RIA Novosti reported yesterday, citing Ukrainian Energy Minister Eduard Stavytskyi. The country doesn’t plan further purchases this year, according to the report.

To contact the reporter on this story: Stephen Bierman in Moscow at sbierman1@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

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