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Europe Relies Less on Russian Gas Than Before

FRANKFURT—The Crimea conflict highlights anew Europe’s reliance on Russian gas, but compared with disputes of the past decade that cut fuel supplies, European countries are now better prepared to weather a showdown. Russia, which over the weekend sparked Western ire by occupying the Crimea region of Ukraine, supplies about 30% of the European Union’s gas by volume, according to Gazprom , the Russian state-controlled gas company. About half of Russia’s gas bound for Europe flows through Ukraine. But those flows halted in 2006 and 2009 amid financial disputes between Moscow and Kiev, with each side blaming the other. During that last spat, gas price soared across Europe and many countries faced shortages. Today, Europe is better prepared to withstand any supply disruptions, experts say. The Continent’s weak economy, new gas pipelines and changing energy policies have weakened demand for fuel and diversified supply routes. Europe today is awash with […]

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Ukraine to face consequences for unpaid gas debt

Russian Prime Minister Dmitry Medvedev warned Ukraine there would be "adverse consequences" should it not settle its outstanding gas debt. "[Anyone] who fails to pay for the supplied goods should be aware that it is fraught with adverse consequences, including those related to the revocation of previously reached agreements on beneficial terms of supplies," the former Russian president said Tuesday. In 2009, Russian energy company Gazprom cut gas supplies to Ukraine because of contractual disputes. That left European nations without a reliable source of natural gas as most of their supplies from Russia pass through the Soviet-era pipeline network in Ukraine. Ukraine last year secured relief from its debt obligations by way of a discount for purchased volumes. Gazprom Chairman Alexei Miller said the discount will be suspended in April unless Ukraine settles its outstanding debt from 2013. Miller said Ukraine paid "a little […]

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Putin putting Europe in its place

How the situation in Ukraine may appear if viewed through the Russian leader’s eyes European leaders meet on Thursday to discuss their response to Russia’s effective invasion of Crimea . Vladimir Putin ’s closest allies were last night looking for a face-saving gesture that would allow Europe to end its preoccupation with Ukraine before the situation descends into violent gesture politics. The Russian leader is said to be deeply concerned at the sluggish and divided response of EU leaders and is now looking for ways to “de-escalate” the tension and allow them to back down while looking less hideously impotent than they currently do. Emissaries of the president are understood to be carrying a secret memo from him to Angela Merkel, David Cameron and François Hollande setting out some initiatives Mr Putin could accept in retaliation for his action: “First, I wish to apologise for any difficulty caused to […]

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Diplomats, business leaders urge new approach to Russian energy

Europe’s institutions should take a tough line on Russian energy, as Moscow’s intervention in Ukraine continues, a group of experts on the region said at a roundtable discussion at London’s Chatham House Wednesday. The expert group of former diplomats and business leaders suggested a series of short and medium-term responses to the tensions between the two former allies, pointing out that Russia’s energy interests are a major source of medium-term leverage for the EU and the West, owing to the revenues they bring in. "The EU should convey the message to Russian energy companies that ‘business as usual’ is not an option while intervention in Ukraine continues," the roundtable participants said in a statement following the event. They added that the EU should also consider alternatives to the South Stream pipeline, which would allow Russian gas giant Gazprom’s exports to bypass Ukraine altogether. "If […]

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Russia to hike price on gas supplies to Ukraine

Russia’s state-controlled natural gas giant Gazprom says it will cancel a price discount for natural gas supplies to Ukraine. Gazprom chief Alexei Miller said Tuesday in televised remarks that Ukraine has accumulated a $1.5-billion debt for Russian gas supplies. He added at a meeting with Russian Prime Minister Dmitry Medvedev that Gazprom will cancel a price rebate for Ukraine starting April 1. Russia offered the discounted price and a $15-billion bailout to Ukraine in December following President Viktor Yanukovych’s decision to ditch a pact with the European Union in favor of closer ties with Russia. © 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Learn more about our Privacy Policy and Terms of Use .

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China and Russia at the Altar of Gas

The saga over whether Russia will supply natural gas to China has always resembled rival families negotiating a marriage dowry. For a decade, the two sides have wanted different things. Now a match between the world’s largest gas exporter and one of the world’s fastest-growing gas markets seems within reach. That’s in part because Russia is afraid that the longer it waits, the less it will get in dowry. And if the deal goes through, it has the potential to change the way Asia gets its energy. An outline of a deal hashed out last year would have Russia’s state champion Gazprom supply counterpart China National Petroleum Corporation with 3.75 billion cubic feet a day for 30 years starting in 2018. China’s current daily gas demand is about 16 billion cubic feet, which the government aims to double by 2020. Russia says the two sides have agreed on a […]

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Ukraine racking up gas debts, Gazprom says

Russian energy company Gazprom said top executive Alexei Miller grilled Ukraine’s vice prime minister on repayment of Kiev’s natural gas debt. Gazprom said Monday in a statement Miller met in Moscow with Ukraine’s acting Deputy Prime Minister Yuri Boiko to discuss "the issues of operation in the winter period and repayment of the existing gas debt by [Ukraine’s natural gas company] Naftogaz Ukrainy." Russian President Vladimir Putin’s office said Ukraine is already falling behind on its energy bills and owes Gazprom more than $3 billion, state news agency RIA Novosti reported. Gazprom in 2009 cut gas supplies to Ukraine because of contractual disputes. That left downstream consumers in Europe in the cold for several weeks as most of their Russian gas runs through the Soviet-era transit system in Ukraine. After Ukraine’s November decision to suspend association talks with the European Union, Putin cut […]

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Russia concerned by Ukrainian fracking

The Russian Natural Resources Ministry said Friday it was concerned hydraulic fracturing in neighboring Ukraine could pollute regional water supplies. The ministry issued a statement Friday saying it was concerned about the prospects for shale natural gas development in neighboring Ukraine. Hydraulic fracturing, known also as fracking, uses large quantities of water mixed with potentially harmful chemicals to get at oil and natural gas deposits locked in shale formations. Environmental groups have expressed concern some of that water could eventually spoil drinking water supplies. Deputy Environment Minister Rinat Gizatulin said there are real concerns about contamination because potential drilling sites may be in close proximity to aquifers. He said Friday a letter was sent to his Ukrainian counterparts calling for a bilateral meeting to address the issue. Chevron and Royal Dutch Shell are among the energy companies interested in developing Ukrainian shale. The government […]

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Shell Venture Starts Fracking Giant Russian Shale Oil Formation

Royal Dutch Shell Plc (RDSA) and OAO Gazprom Neft began a drilling campaign to assess the potential of Siberia’s Bazhenov formation, reckoned to be one of the world’s largest deposits of shale oil. Salym Petroleum Development, the venture between Shell and Gazprom Neft, has started drilling the first of five horizontal wells over the next two years that will employ multi-fracturing technology, according to a statement today. The Bazhenov layer, which underlies Siberia’s existing oil fields, has attracted Shell and Exxon Mobil Corp. (XOM) because it’s similar to the Bakken shale in the U.S., where advances in drilling technology started a production boom. Exxon will also start a $300 million pilot project drilling in a different part of the Bazhenov with OAO Rosneft (ROSN) this year. “This is a big theme for Russia,” according to Ildar Davletshin, an oil and gas analyst at Renaissance Capital in Moscow. “Bazhenov holds […]

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Rise in Russian Oil Output Supports Overstretched Budget

Russia retained the title of the world’s top oil producer with 2013 output reaching a post-Soviet high as rising exports to China and strong prices allow the Kremlin to maintain record spending from an overstretched budget. Energy has been the engine of Russia’s growth during more than a decade of leadership by President Vladimir Putin, with oil and gas accounting for more than half of budget revenues. But the government, which has amassed some of the world’s largest foreign exchange reserves of over $500 billion, has been increasingly overstretching its finances due to social spending promised by Putin before the 2012 election as well as a swelling $50 billion budget for the 2014 Winter Olympics. Keeping oil output high has therefore been a priority for the government. The rise has defied predictions that new fields in East Siberia and the Arctic will […]

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