Is it Time for Winter Gas Disruptions?

A new twist in the on-going saga of natural gas relations between Russia and Ukraine.

Reports indicate that Ukraine’s Naftogaz stopped gas purchases from Russia’s Gazprom as of Saturday.  Last week, Ukrainian President Viktor Yanukovich indicated that the country would secure its gas requirements from European sources if it failed to gain better terms from Russia.

Supplies of Russian gas transited through Ukraine to Europe are apparently unaffected.  The Ukrainian gas transit corridor delivers approximately one-half of Russia’s gas supplies to Europe.

The move by Kiev comes as Yanukovich met with his Russian counterpart Vladimir Putin in Moscow at the weekend.  The two held talks and “comprehensively discussed trade and economic relations of Ukraine and Russia," according to Putin spokesperson Dmitry Peskov.

With Moscow’s demands for Ukraine’s full payment of amounts past due for gas supplies and its opposition to Kiev’s proposed trade and association deals with the European Union, is the stage being set for another gas dispute with potential disruptions to Europe?