The Russian state gas producer Gazprom plans to raise the price of gas sold to Ukraine starting next month.
The higher price, which reverses a discount negotiated in December, is due to Ukraine not paying its gas bill, rather than the tensions between Russia and the new Ukrainian government, Alexei Miller, the Gazprom chief executive, said yesterday. Prices will rise to about US$11.50 per thousand cubic feet in April from $8.10 this month.
Despite the prospect of higher prices for Ukraine and fears of a military confrontation, European gas prices stabilised after a run-up on Monday, the first day markets opened after Russia sent troops to the Ukrainian peninsula of Crimea.
Crude futures prices on both sides of the Atlantic also fell, with Brent slipping 1.47 per cent to $109.54 a barrel.
“The retreatment that it’s made earlier today has brought levels back to pre-Russia walking-into-Crimea numbers,” said Tony Machacek, a energy broker at Jefferies Bache in London. “I can’t see Putin pulling his troops out very quickly, so I think this will have a bullish impact on prices. We’ve seen a sharp retracement today, but I would be surprised if they went down any further.”
Yesterday Mr Putin said said there was “no necessity” to use military force at present. Troops stationed in Crimea, where Russia keeps its Black Sea fleet, have only been securing their bases, he said.
“The use of the military is an extreme case,” he told reporters at his residence near Moscow.
Abu Dhabi-affiliated companies investing in European gas markets appeared unconcerned by the situation in Ukraine.
OMV, the Austrian gas producer that is a quarter-owned by Abu Dhabi, said it was not reconsidering its decision to abandon the Nabucco pipeline project, an ambitious plan to diversify European gas supplies away from Russia that was shut last year.
“Currently we do not see any interruption of gas supplies to Europe,” said Robert Lechner, an OMV spokesman. “In Austria we are also in the convenient position to have the gas storages filled at a level of around 40 to 45 per cent.”
Abu Dhabi National Energy (Taqa) is scheduled to start up its Bergermeer gas storage site in the Netherlands next month, where Gazprom is among the companies that have reserved space. It will primarily serve as a seasonal storage site.
“Domestic gas production is declining in Europe and as a result there is a lack of flexibility for suppliers to respond to demand and supply fluctuations,” said a spokesman. “There is a need for more flexibility and this is why gas storage is needed.”
ayee@thenational.ae
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