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Ukraine Suspends Gas Payments to Russia
Townhall.com ^ | April 13, 2014 | Mike Shedlock

Posted on 04/13/2014 9:46:36 AM PDT by Kaslin

The crisis in Ukraine took a turn for the worse this weekend. Many distinct events are in play. Here are a few top headlines

Armed Men Seize Police Station in Slavyansk

The Wall Street Journal reports Pro-Russia Protests Spread, Police Station Seized.

Pro-Russia protests spread Saturday in eastern Ukraine as armed men, some in unmarked, military-style uniforms, moved to commandeer more government buildings—a dramatic escalation that the Ukrainian government and Washington tied to Moscow.

Ukraine's acting president called an emergency meeting of the country's top security officials in the capital, Kiev, as police clashed with attackers in several spots in the largely Russian-speaking, eastern part of the country.

Some 20 men wearing camouflage, some with military-style equipment and weapons, commandeered a police station and security-service office early Saturday in Slavyansk, a small city that previously hadn't seen the kind of pro-Russian fervor that erupted anew in the area last weekend.

Ukraine's Interior Minister Arsen Avakov said Saturday evening that police were fighting with attackers in the nearby town of Kramatorsk and had repelled a similar attack in a third town, Krasny Liman.

Saturday afternoon, police in Poltava Region said they had stopped several buses carrying what they said were pro-Russian activists carrying gasoline bombs and makeshift weapons. They were headed to Kharkiv, where protests were scheduled. Police detained about 70 of the activists.

Protesters remain barricaded Saturday in the regional government headquarters in Donetsk and the security-service offices in Luhansk, which they had occupied last Sunday. Authorities pushed a group out of a government building in Kharkiv earlier in the week.

Western officials say Moscow has tens of thousands of troops on its side of the border that could invade Ukraine in a matter of hours. Moscow denies that.

Ukraine Prepares Armed Response

Reuters reports Ukraine Prepares Armed Response as City Seized by Pro-Russia Forces.

Armed separatists took virtual control of a city in eastern Ukraine on Saturday and Kiev prepared troops to deal with what it called an "act of aggression by Russia".

Pro-Russian activists carrying automatic weapons seized government buildings in Slaviansk and set up barricades on the outskirts of the city. Official buildings in several neighboring towns were also attacked.

The developments have increased concerns of a possible "gas war" that could disrupt energy supplies across the continent.

Washington backed Kiev's assessment that Moscow was responsible. "Worrisome violence in ... Ukraine today. Russia again seems to be behind it," State Department spokeswoman Jen Psaki said on Twitter.

ROADBLOCKS AROUND CITY

On a road leading into Slaviansk, other members of the group, armed with automatic rifles, set up a roadblock and checked vehicles entering the city, a Reuters reporter said.

There was no sign of any Ukrainian law enforcement officials in the city.

Ukraine's Western-backed government warned of tough action if the militants did not lay down their weapons, but it was unclear if the local law enforcement agencies were taking orders from Kiev any more after the local police chief quit.

Kostyantyn Pozhydayev came out to speak to pro-Russian protesters at his offices in the regional capital, Donetsk, and told them he was stepping down "in accordance with your demands". Some of his officers left the building.

The occupations are a potential flashpoint because if protesters are killed or hurt by Ukrainian forces, that could prompt the Kremlin to intervene to protect the local Russian-speaking population, a repeat of the scenario in Crimea.

Ukraine's acting foreign minister, Andriy Deshchytsia, said he had spoken by telephone with Russian Foreign Minister Sergei Lavrov and demanded Moscow stop what he called "provocative actions" by its agents in eastern Ukraine.

Lavrov, in a statement issued by his ministry, said there were no Russian agents in the region and that it would be "unacceptable" if Ukrainian authorities were to order the storming of the buildings.

Ukraine Suspends Gas Payments to Russia

Reuters reports Ukraine Suspends Gas payments to Russia

Ukraine's state-run energy company Naftogaz has suspended gas payments to Russia until the conclusion of price talks, chief executive Andriy Kobolev was quoted as saying on Saturday.

Russian gas giant Gazprom earlier this month increased gas price for Ukrainian consumers to $485 per 1,000 cubic meters (tcm) from $268 for the first quarter, saying Kiev was no longer eligible for previous discounts.

"The question of repayment of debt is directly linked to the maintenance of gas prices at the level of the first quarter," Kobolev told the Zerkalo Nedely weekly in an interview, referring to the original price of $268 per tcm.

"We see no reason to revise the price. We consider the price at around $500 as non-market, unjustified and unacceptable. Accordingly, we have suspended payments for the period of the price negotiations."

Russian President Vladimir Putin warned on Thursday that Moscow could cut off gas to Ukraine, potentially threatening European supplies, but later played down the threat.

"I want to say again: We do not intend and do not plan to shut off the gas," he said on Friday.

Gas Wars

Given that Ukraine has suspended payments, I find Putin's statements puzzling. If Putin will not shut off the gas, then Ukraine has no incentive to pay.

Expect Putin to quickly change his mind about shutting the pipeline if Ukraine does indeed refuse to pay. He will have a legitimate reason.

As for market prices, Russia can charge what it wants in my opinion. Countries can either pay or not pay.

This is the consequence of being dependent on a single supplier.


TOPICS: Business/Economy; Editorial; Foreign Affairs; Russia
KEYWORDS: energy; naturalgas; ukraine; vladimirputin
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To: FreeReign

Ukraine opposition leaders sign deal with government

Friday 21 February 2014

Ukraine’s president, Viktor Yanukovich, and three opposition leaders have signed an agreement intended to end a crisis that sparked bloody clashes between protesters and police on the streets of the capital, Kiev.

The deal sets out plans to hold early presidential elections, form a national unity government and revert to the 2004 constitution, removing some of the president’s powers. Yanukovich did not smile during a signing ceremony lasting several minutes in the presidential headquarters, but he did shake hands with the opposition.

The deal was also signed by two European Union foreign ministers who helped broker it in tortuous negotiations that lasted more than 30 hours. “This agreement is not the end of the process. It’s the beginning of the process,” the German foreign minister, Frank-Walter Steinmeier, said after the signing.

http://www.theguardian.com/world/2014/feb/21/ukraine-president-says-deal-has-been-reached-opposition-bloodshed


41 posted on 04/13/2014 10:56:06 AM PDT by jimbo123
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To: FreeReign

There were two separate gas discount agreements with Russia and Ukraine, one discount for the Black Sea Fleet lease and another as part of the December 2013 loan package designed to keep Ukraine out of default.

After Yanukovitch was overthrown the Russians halted the loan package and as of April 1st the gas discount associated with it.

Russia later on decided they no longer would abide by the Black Sea Fleet agreement, which they had pre-paid a portion of, because Ukraine still wasn’t paying anything for the gas they consumed and because Crimea is no longer part of Ukraine.

So there were really two gas discounts that Russia was giving, neither of which really mattered since Ukraine was a complete deadbeat about paying for any of it.

So Ukraine owes Russia for the gas and it owes Russia for the portion of the loan it got in December, and it still owes the IMF for a loan it got in 2008, and with less legal certainty it owes for the portion of the Black Fleet lease that Russia pre-paid.

All of which will soon be transferred to the tab of the US taxpayers, thanks to the meddlesome neocons at the Obama State Dept. and the Republican pep squad in the US Senate.


42 posted on 04/13/2014 10:58:53 AM PDT by mac_truck ( Aide toi et dieu t aidera)
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To: jimbo123
Ukraine opposition leaders sign deal with government

What?

As I pointed out to you Yanukovich broke the agreement(that he signed) by NOT signing the Rada law that restored the Constitution to its 2004 form.

Do you now understand?

43 posted on 04/13/2014 11:04:45 AM PDT by FreeReign
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To: mac_truck

Well, finally someone got it right.


44 posted on 04/13/2014 11:12:12 AM PDT by UCANSEE2 (Lost my tagline on Flight MH370. Sorry for the inconvenience.)
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To: mac_truck
There were two separate gas discount agreements with Russia and Ukraine, one discount for the Black Sea Fleet lease and another as part of the December 2013 loan package designed to keep Ukraine out of default.

The 2013 loan package wasn't signed off by either side.

The only discount active was the Black Sea Fleet lease discount.

45 posted on 04/13/2014 11:14:56 AM PDT by FreeReign
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To: FreeReign

The Right Sector Nazis condemned the deal and said they wanted Yanukovich’s head immediately after it was signed. And then Yanukovich fled Kiev to get the hell out of town. How was he supposed to sign the bill when the Bandera Nazis were fully in control of Kiev?


46 posted on 04/13/2014 11:16:32 AM PDT by jimbo123
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To: FreeReign
The 2013 loan package wasn't signed off by either side.

The only discount active was the Black Sea Fleet lease discount.

More precisely I should say the 2013 loan package was never ratified and Russia never bought the bonds.

47 posted on 04/13/2014 11:18:41 AM PDT by FreeReign
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To: jimbo123
How was he supposed to sign the bill when the Bandera Nazis were fully in control of Kiev?

Nonsense.

48 posted on 04/13/2014 11:20:07 AM PDT by FreeReign
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To: mac_truck
So Ukraine owes Russia for the gas and it owes Russia for the portion of the loan it got in December, and it still owes the IMF for a loan it got in 2008, and with less legal certainty it owes for the portion of the Black Fleet lease that Russia pre-paid.

You forgot the part where Russia owes Ukraine a naval base and some territory. If the deal is torn up.

49 posted on 04/13/2014 11:20:07 AM PDT by 1rudeboy
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To: WhiskeyX; Monmouth78

Read Monmouth78’s post #3 above. As he points out, the existing price was subsidized. It is now being raised to the European market price.


50 posted on 04/13/2014 11:22:38 AM PDT by USFRIENDINVICTORIA
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To: USFRIENDINVICTORIA
Read Monmouth78’s post #3 above. As he points out, the existing price was subsidized. It is now being raised to the European market price.

You need to read past post #3.

51 posted on 04/13/2014 11:24:55 AM PDT by FreeReign
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To: FreeReign; Monmouth78

The issue is incredibly complex. Most “news” and “analysis” on the topic is propaganda. I get that, and I’m not carrying any brief for Russia.

However, there are some simple, easily-verifiable facts — and we’d all be better off sticking to them (however rare they may be). The market price for Russian gas in most of Europe is a simple, easily-verifiable fact. Let’s start on the basis of that fact.

One may go from the known facts (the price Russia was charging Ukraine was less than the market price of gas in most of the rest of Europe); and argue about more complex, less easily-verifiable facts — contracts, transit fees etc. What you can’t do (if you’re interested in the truth, and not propaganda) is just ignore the facts.


52 posted on 04/13/2014 11:39:38 AM PDT by USFRIENDINVICTORIA
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To: WhiskeyX

I deny international law. International law is for Commies/leftists. Are you a one world government type of radical?


53 posted on 04/13/2014 11:40:32 AM PDT by impimp
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To: impimp
One may go from the known facts (the price Russia was charging Ukraine was less than the market price of gas in most of the rest of Europe); and argue about more complex, less easily-verifiable facts — contracts, transit fees etc. What you can’t do (if you’re interested in the truth, and not propaganda) is just ignore the facts.

Irony.

Ignoring the facts about the contract and Russia's annexation of Crimea.

Some much for the truth.

54 posted on 04/13/2014 11:50:06 AM PDT by FreeReign
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To: USFRIENDINVICTORIA; impimp

Sorry impimp. Post 54 was meant for USFRIENDINVICTORIA.


55 posted on 04/13/2014 11:51:45 AM PDT by FreeReign
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To: FreeReign; Monmouth78

I never ignored them — I just said that they are more complex, and less-easily-verified. And they are. The market price for natural gas in Europe is easy to determine (in fact, it’s determined many times a day). The issues regarding contracts, transit fees etc. are the type of things that make lawyers rich. You may be absolutely right about them — but, you can’t build a credible case by denying the simple, easily-verifiable facts.


56 posted on 04/13/2014 12:01:04 PM PDT by USFRIENDINVICTORIA
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To: USFRIENDINVICTORIA

I never ignored the market rate for gas.


57 posted on 04/13/2014 12:11:09 PM PDT by FreeReign
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To: USFRIENDINVICTORIA

“Read Monmouth78’s post #3 above. As he points out, the existing price was subsidized. It is now being raised to the European market price.”

I don’t need to read it, because I trade the financial securities and am well aware of the day to day market prices of oil and gas. Yes, Russia subsidized its pricing of natural gas as a monopolist undercutting the competition in Europe and thereby discourage Europe from developing competitive sources as alternatives to the Russian supplies. Once the competition had been eliminated or strongly suppressed enough to make the European customers dependent upon the Russian subsidized pricing and volumes, Russia then used their monopoly position to raise their monopolized prices higher than would have existed had the competitors not been previously displaced by Russia’s subsidized supplies. Poland in particular and some other members of the EU have been working since the Russian interruption of supplies in 2009 to replace the Russian supplies at any cost to preserve their sovereign independence from Russian threats to further interrpt Russian supplies. It will take some time for the European market to replace the Russian supplies sufficiently for the market prices to normaliz again at the more natural lower pricing.

Meanwhile, the Russian war of aggression against the Ukraine has handed the Ukraine the legal right to void or suspend all contracts and seize all Russian assets, including the ~2 billion dollar accounts receivable owed by the Ukraine to Russia’s Gazprom, as belligerant properties and war reparations.


58 posted on 04/13/2014 12:19:10 PM PDT by WhiskeyX
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To: impimp

“I deny international law. International law is for Commies/leftists. Are you a one world government type of radical?”

You’ve got it backwards, it is the “Commies/leftists” who deny, abrogate, manipulate, and abuse international law. By saying you “deny” international law you are associating yourself with the acts of the Communists and the Putin regime in Russia, and any acts you may take in defiance of international law would make you an international criminal.


59 posted on 04/13/2014 12:22:58 PM PDT by WhiskeyX
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To: WhiskeyX

Like I said — the issue is complex. I was just trying to make one simple point, about one simple fact — the market price of gas in Europe.


60 posted on 04/13/2014 12:26:30 PM PDT by USFRIENDINVICTORIA
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