Ukraine's Small Gas Payment To Russia Gets Supplies Flowing For Another Few Days

Ukraine sent a prepayment of $15 million to Russia’s state-controlled Gazprom OAO Friday to keep much-needed natural gas flowing to the battered country for a few more days, Ukrainian and Russian officials said. The latest development in the gas trade between the two nations came as fighting cooled between the Ukrainian military and pro-Russian rebels. Russia has repeatedly used its role as the gas supplier to Ukraine in attempts to pressure Kiev to make concessions to the separatists, who the pro-West government and its Western allies say are directly supported by the Russian military.

This week, Russian officials said they were prepared to supply gas to rebel-held territory for free, while cutting off the spigot to the rest of the country by the beginning of next week unless Ukraine made a payment. A cutoff of the gas supply to rebel-held areas, already suffering a massive humanitarian crisis, “smacks of genocide,” Russian President Vladimir Putin said Wednesday. Many in eastern Ukraine have gone months without heat, electricity and clean water.

“Gazprom yesterday confirmed they would not count the gas supplied to Donetsk and Luhansk as covered by our prepayment, and we immediately made a small advance for March ... to calm the nerves of our European colleagues,” said Andriy Kobolev, CEO of the Ukrainian state gas company Naftogaz.

Ukraine agreed late last year to pay in advance for its gas supplies, which Russia has cut off three times during the past decade over missed payments. The European Commission helped ink a deal between the countries in December that set a price for Russian supplies to Ukraine through the end of the winter. That period ends March 31, when the two sides will again need to hammer out a payment rate. The EC invited representatives of the two sides back to the negotiating table in Brussels Monday, according to Reuters.

Russia supplies almost all of Ukraine’s natural gas and 15 percent of Europe’s natural gas through Ukrainian territory, which sparked concern that a cutoff there could affect supplies in countries to its west. Europe obtains about 30 percent of its natural gas from Russia.