The Russia–Ukraine gas conflict started because of the Ukrainian company Naftohaz Ukrayiny, which produces oil and gas and Russian gas supplier company Gazprom over natural gas supplies, prices of gas, and debts. It turns to be not just simple business disputes but it turns to be a huge scandal between countries, its involved political leaders from several countries because some of the European countries are dependent natural gas which imports from Russia and transported through Ukraine. As for today, Russia provides around 30% of the natural gas consumed in the European Union; approximately 80% of this gas goes through pipelines across Ukrainian soil prior to arriving in the European Union. In the end, supplies from Russia, which are less expensive because of lower transportation costs, were sufficient to meet the EU’s needs, and the idea of meaningful supply diversification that would reduce the amount of gas being bought from Russia fell by the wayside. paid them for the next delivery.The conflict started back in March 2005 because two companies couldn’t decide about the price of natural gas supplied and the cost of transit. During this conflict, Russia calimed Ukraine that they were not paying for gas which Gazprom was delivering, but diverting that which was proposed to be exported to the EU from the pipelines.
In the beginning, Ukrainian authorities refused the accusation, but then few month later Naftohaz admitted that natural gas which was supposed to go to other European countries was maintained and used for domestic needs. On 1 January 2006, Russia stopped to supply its gas which was passing through Ukrainian territory, but a few days later countries did an agreement, and the supply was restored. But in October 2007 new conflict began over Ukrainian gas debts. This situation led to a reduction of gas supplies in March 2008. After that, during several years two companies had very hard relationships. On 8 June 2010, a Stockholm court of arbitration made a Ukranian company Naftohaz return 12.
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1 billion cubic meters of gas to RosUkrEnergo, which is a Swiss-based company (Gazprom controls 50% stake). In April 2014 ‘Gazprom’ canceled Ukraine’s natural gas discount which was agreed at the end of 2013 Ukranian-Russian action plan because since 2013 their debt to ‘Gazprom’ was $1.7 billion. Later in December, the price jumped up to $485 per 1,000 cubic meters because the Russian government canceled an export-duty exemption for Gazprom. On 16 June 2014 Gazprom stated that Ukraine’s debt to the company was $4.5 billion.
On 30 May 2014 Ukraine paid $786 million to Gazprom. On 25 November 2015 Gazprom halted its exports of Russian natural gas to Ukraine.According to the Ukrainian government, they had stopped buying from Gazprom because Ukraine did buy natural gas cheaper from other suppliers. According to Gazprom they stopped deliveries of gas because Ukraine had not paid them for the next delivery.
Russia plans to completely abandon gas supplies to Europe through Ukraine after 2018. Obveously this conflic affected all the country. By stopping sending gas through Ukraine Russian gas company ‘Gazprom’ might open new markets and opportunities for themselves.
For example right now they are working with Turkey on Turkish stream . Also right now Russian and German governments are working on Nord Stream 2. It could be a good alternative how to transfer gas to the EU.
As was said n introduction the EU are dependent on Russian gas and thats why ‘Gazprom’ might increase prices.???One of the negative things is that now company should find another way of how to trasfer gas to the EU. Right now, Gazprom makes $ 60-$70 billion because of the gas they sell to the EU a year, which is 60% of its total revenue. For now its very complicated for ‘Gazprom’ to transfer its gas to the EU and thats why they are loosing a lot of money. Also from the graph below, we can see examples of some European countries and how they are dependent from Russian gas.
We might ruin relationships with those countries, because ‘Gazprom’ cannnot give them the amount of gas they actually need. From the graph below we can see that in 2012 almoust all European countries were depended on Russian gas.Yes, Russia has another alternative ways of how to transfer gas to Europe. One of them is Turkish stream. Its an international project of the gas pipeline from Krasnodar Territory of Russia on the bottom of the Black Sea all the way to the Greek-Turkish border. Gazprom intends to transport gas to the south-eastern European countries.
Work on laying the gas pipeline began in June 2015, but was postponed due to political reasons. In February 2017, the construction of the Turkish Stream began. For now the built around 600km out of 1100km of the gas pipeline. Another alternative could be Nord Stream 2.