Russia Shocks Europe By Ending All Gas Transfers Through Ukraine

European dependance on Russian natural gas

(image by Michael Collins)

Daily Mail: Europe plunged into energy crisis as Russia cuts off gas supply via Ukraine

WNU Editor: This is a major announcement from Russia .... the equivalent of using a nuclear economic bomb .... and one that will severely impact Ukraine and all of Europe. Not surprising .... prices are now skyrocketing throughout Europe, and for a country like Ukraine that earned fees and concessions for this transfer .... that is now all but dead and one that will profoundly impact its finances. And while the international media is focused on international terrorism ..... this is also a big story .... it is Russia's way of retaliating against sanctions .... and one that is going to hurt everyone in Europe. This probably explains why German Chancellor Merkel had harsh words for Putin today ..... she understands what the consequences of this cut-off will have on Europe .... and on Germany.

More News On Russia Ending All Gas Transfers Through Ukraine For Europe

Russia to Shift Ukraine Gas Transit to Turkey as EU Cries Foul -- Bloomberg
Russia Cuts Off Ukraine Gas Supply To 6 European Countries -- Zero Hedge
Russia Fires Ukraine as Natural Gas Transit for Europe -- OPEdNews
Gazprom informs EC official on transit risks for European customers on Ukraine territory -- Gazprom

Update: This post has a good collection of tables and graphs that outline Europe's dependence on Russian natural gas exports ... that link is here.

Update #2: This post gives a good explanation on the significance of what Russia did today .... Russia pulls trigger on two moves to counter the U.S. and end petrodollar -- Kenneth Schortgen Jr, Washington Examiner

WNU Editor: Hat Tip to reader Jay who gave me the heads up on this story earlier today.

In A Major Diplomatic Defeat, Russia Announces That It Will Not Build The South Stream Gas Pipeline To Europe

In Diplomatic Defeat, Putin Diverts Pipeline to Turkey -- New York Times

MOSCOW — President Vladimir V. Putin said Monday that he would scrap Russia’s South Stream gas pipeline, a grandiose project that was once intended to establish the country’s dominance in southeastern Europe but instead fell victim to Russia’s increasingly toxic relationship with the West.

It was a rare diplomatic defeat for Mr. Putin, who said Russia would redirect the pipeline to Turkey. He painted the failure to build the pipeline as a loss for Europe and blamed Brussels for its intransigence.

The decision also seemed to be a rare victory for the European Union and the Obama administration, which have appeared largely impotent this year as Mr. Putin annexed Crimea and stirred rebellion in eastern Ukraine.

Read more ....

More News On Russia Announcing That It Will Not Build The South Stream Gas Pipeline To Europe

Putin: Russia forced to withdraw from S. Stream project due to EU stance -- RT
Gazprom to build new 63 bcm Black Sea pipeline to Turkey instead of S. Stream -- RT
Russia Scraps South Stream Gas Project: Gazprom -- RIA Novosti
Russia drops South Stream gas pipeline plan -- BBC
Putin says Russia to stop South Stream gas pipeline project -- Euronews
Putin says Russia scrapping South Stream gas pipeline, blames Europe -- L.A. Times

Tho Will Pay-Off Ukraine's Multibillion-Dollar Gas Debt?

Reuters/Valentyn Ogirenko

Ukraine's Multibillion-Dollar Gas Debt: Who Pays? -- RT

Ukraine plans to buy $770 million worth of gas (2 billion cubic meters) from Russia this winter to keep the heat on, but before that, they must pay off $1.45 billion in debt. The question is: who is going to pay the bill?

All three parties, Russia, the EU, and Ukraine met in Brussels on Tuesday and confirmed Kiev will pay $385 per 1,000 cubic meters of Russian supplied gas through the end of March. Before Ukraine can start purchasing gas, they need to pay off $1.45 billion in debt.

“There’s one obstacle: Ukraine failed to pay for Russian-supplied gas for seven months,” Oettinger said Tuesday. It will be difficult for Ukraine to find a benefactor, since, as Oettinger pointed out, its credit history is less than stellar. The economy is in ruin and may already need extra IMF money to stay afloat.

Read more ....

My Comment: It is always about the money. Bottom line .... Ukraine is bankrupt and it does not have the means to pay-off this debt. They are hoping that the Europeans would give them the money to do so .... but the problem (from the European perspective) is that the last time they did that, the government in Kiev essentially took the money to pay off it's government employees and to pay for it's war against the eastern part of the country. I doubt that the EU is not going to make the same mistake again .... hence the impasse of today. My prediction .... the EU will pay-off this debt, and they will give the Ukraine government extra money via through loans and other subsidies.

Ukraine Preparing To Halt Russian Transit Gas Flows To Europe

The list of possible sanctions includes a “complete or partial ban on the transit of all resources,” Prime Minister Arseniy Yatsenyuk told reporters in Kiev today in response to a question about halting gas flows. Photographer: Vincent Mundy/Bloomberg

Ukraine Open To Halting Gas Flows In Russia Sanctions -- Bloomberg

Ukraine said it’s open to halting Russian gas supplies to Europe through the country as it plans sanctions on President Vladimir Putin’s government as part of its battle against pro-Russian separatists.

The list of possible sanctions includes a “complete or partial ban on the transit of all resources,” Prime Minister Arseniy Yatsenyuk told reporters in Kiev today in response to a question about halting gas flows. Measures may also include a ban on Russian planes overflying Ukraine, he said, while defense-industry cooperation will be reduced. A draft law, which requires parliamentary approval, also proposes restrictions on ships entering Ukrainian waters.

Read more ....

More News On Ukraine Preparing To Halt Russian Transit Gas Flows To Europe

Ukraine transit sanctions could hit 'all types of transit': PM -- Reuters
Ukraine may block all transit from Russia in sanctions row -PM -- RT
Ukraine crisis: Kiev ready to sanction Russia in fight to stop 'financing terrorism' -- The Independent
Ukraine govt to submit bill on 26 types of sanctions to Verkhovna Rada -- Interfax-Ukraine

My Comment: This is not going to go over well in the rest of Europe. My analysis .... this is a shakedown on Europe .... the government in Kiev is basically saying to the EU that they should pay  Ukraine's Russian gas bill .... and if they do .... they will let the Russians ship gas to Europe.