Due to the contracts signed by Yulia Tymoshenko in 2009, Ukraine will be overpaying from 3 to 5 billion USD for gas annually up to the year 2019.

On April 10 a press conference of Ukrainian officials was held at the premises of NCI European Parliament in Brussels, with the participation of European journalists, experts and community leaders. The topic of the press conference is “Why is Y. Tymoshenko still in jail?”

These results have already been reported to the Ukrainian Parliament’s deputies on March 20, 2012. After hearing the report, 266 people’s deputies out of 450 agreed with the Commission’s arguments. These are the results of the work of the parliamentary Provisional Investigatory Commission.

The Provisional Investigatory Commission has been working for the period from March 2011 to March 20, 2012 in accordance with the following principles:

а) The Commission’s conclusions were made solely on the basis of documents received through official channels;

b) The Commission’s work was carried out with the participation of the representatives of the governmental bodies as well as the opposition in an open mode;

The results of the Commission’s work had shown that during the negotiations and signing of the gas contracts the Prime Minister Tymoshenko violated the following rules:

а) concealed from the public and the authorities the facts of the conflict of interests and dependence on Russia – namely, the debt of her private companies to the Ministry of Defence of the Russian Federation in amount of 405 million US dollars and the criminal case on a charge of bribery;

b) held secret negotiations with the Prime Minister of Russia, in the result of which she agreed to the signing of unfair contracts that violated the provisions of the previous international agreements;

c) knowing that the government of Ukraine had refused to approve the Directives on signing of the contracts, approved them personally, though, only the Cabinet of Ministers, as the collegial body, has the right for such approval;

d) put pressure on the head of the company and made him sign the contracts, threatening him with the dismissal.

In accordance with the comparative analysis of the Criminal Code of Ukraine and other European countries it was proved that 11 EU member states have articles providing the punishment under the criminal law for such crimes.

Image Courtesy of    Telekhovskyi / Shutterstock.com

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At the click of a single button, Russian Prime Minister, Vladimir Putin, opened the first Nord stream gas pipeline this week. The pipeline is located at the portovaya compressor station, along at the Russian-Finnish border.

The 1220 km Nord Stream Pipeline was constructed in order to deliver gas directly from Russia’s Vyborg to Germany’s Greifswald across the Baltic Sea. Thus far, the Nord Stream is a twin pipeline, which cost $12.5 bn to build. On completion of the second pipeline by 2013, the system will be able to move 55 bn cu m of gas per year, according to the British Broadcasting Corporation (BBC).

According to Putin, for the next 50 years, the Nord Stream will supply an annual of 55 billion cubic meters of gas not only to Germany but also to the United Kingdom, Denmark and Netherlands.

Many see the benefits of this new tactic. “Nord Stream is important as it will reduce supply uncertainty and price volatility in the winter,” John Fahy, managing director of London-based consultants Eras Ltd., said in an e-mail, according to Businessweek.

Prior to the Nord Stream, Russia relied on land based transit and transportation of gas via Ukraine. The Ukraine and Russia often disagreed. A major conflict in 2006 between Russia and the Ukraine occurred when Ukraine failed to agree with Russia on a price issue.

According to Russian authorities, Ukraine often refused to pay the prices that Russia asks for; this battle has been an on-going issue from the time of movement the Soviet Union collapsed. Russia also accuses Ukraine of siphoning gas to cover its own shortages. In 2009 the battle over gas prices between Russia and Ukraine reached an extraordinary scale.

These conflicts resulted in Russian stopping the supply of gas in winter to Europe, during the coldest temperatures. This left many European customers shivering without heat. According to Reuters, the pipeline will lesson Russia’s reliance on Ukraine who currently transports close to 80 percent of its exports to Europe.

With a lucrative market for its natural resources, many forecast that Moscow will profit off this new system. Meanwhile, the Ukraine is showing concern over the situation, feeling as though Russia is backing out on their working relationship. “You cannot just unilaterally break a contract,” Ukraine’s Deputy Prime Minister, Igor Sechin, told reporters at the Nord Stream launch.

Sechin is a close ally of Putin, Reuters said. At the launch, Putin commented on the circumstances. “As with any other transit country, there is always a temptation to exploit its unique transit status” and that, he said, is ending. Businessweek reported that the Nord Stream pipeline will carry enough gas to supply 26 million European home.

Completion of the first phase of Nord Stream has increased doubts of Ukraine’s future gas purchases from Russia and the process of negotiation is also under doubts. Construction of Nord stream is not the only blow to transit nations since Russia also unveiled plans for construction of a South Stream which will run from Southern Russia to Bulgaria under the Black Sea.

Some say supply disruptions will be the thing of past upon the completion of second and third phases of the project.

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