Ukraine's Parliament Passes Sanctions On Russia, Could Hurt EU

Business » ENERGY | August 12, 2014, Tuesday // 16:17
Bulgaria: Ukraine's Parliament Passes Sanctions On Russia, Could Hurt EU Ukrainian Prime Minister Arseny Yatseniuk addresses the parliament in Kiev. Photo: EPA/BGNES

Ukraine’s Parliament has approved at first reading an anti-Russian sanctions package that includes 29 measures, reports 

Some of them, including the potential ban on transit of Russian natural gas and other energy resources through Ukraine, however, could hurt the EU.

Europe gets about 15% of its gas requirements from Russia, with Bulgaria, the Baltic States, Finland and the Czech Republic are fully dependent on Russian supplies.

According to the Russian wire agency ITAR-TASS, Germany, which covers a little over one third of its needs with gas from Russia, has urged Ukraine not to block oil and gas supplies to Europe.

“The federal government hopes that Ukraine is not going to implement a measure which Prime Minister Arseniy Yatsenyuk announced on Friday,” German government’s spokesperson Steffen Seibert said on Monday.

Last week Ukraine’s Prime Minister Arseniy Yatsenyuk introduced a bill to parliament sanctioning Russia that included a ban on all transit through its territory. The bill contained 26 restrictions on Russia, but the most controversial was a ban on energy transit. Yatsenyuk hopes this will help halt his country’s dependence on Russian gas, but the EU might be hurt the hardest.

A possible solution of the problem is the signing of new direct agreements between the Ukrainian state-owned company Naftogaz and Russian companies who are not on the sanctions list for gas transit. 

Such companies, according to a Naftogaz statement, released on Monday, will be cleared to carry out gas transit through the country to the EU, Turkey and Moldova.

Naftogaz of Ukraine insists on being a reliable partner in natural gas transportation to the EU. The company affirms its readiness to further conduct flawless supplies of natural gas to European consumers,” CEO Andriy Kobolev said.

Gerhard Roiss, chief executive of the Austrian oil and gas company OMV, said on Tuesday that Ukraine stopping transit of Russian gas was an unrealistic scenario.

Experts suggest that ending transit through Ukraine could mean more support for Russia’s South Stream project which has been under EU scrutiny. The European Commission wants project leader Russia’s Gazprom to comply with anti-monopoly legislation.

A search for alternative routes to get Russian gas should also give a boost to another gas pipeline bypassing Ukraine – Nord Stream. Currently it is working at half capacity and a Ukraine transit ban could be the catalyst to have it fully working.

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Tags: Ukraine, Naftogaz, Arseniy Yatsenyuk, Prime Minister, gas, natural, transit, South stream, Nord Stream, Bulgaria, Germany, OMV, Russia
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