VZCZCXYZ0329
OO RUEHWEB

DE RUEHKV #0469 0631133
ZNR UUUUU ZZH
O 031133Z MAR 08
FM AMEMBASSY KYIV
TO RUEHC/SECSTATE WASHDC IMMEDIATE 5113
INFO RUCNCIS/CIS COLLECTIVE IMMEDIATE
RUEHZG/NATO EU COLLECTIVE IMMEDIATE
RHEBAAA/DEPT OF ENERGY WASHINGTON DC IMMEDIATE
RUCPDOC/DEPT OF COMMERCE WASHDC IMMEDIATE

UNCLAS KYIV 000469 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR EUR/UMB, EB/ESC/IEC - GALLOGLY/WRIGHT 
DOE PLEASE PASS TO LEKIMOFF, CCALIENDO 
USDOC FOR 4231/IEP/OEENIS/NISD/CLUCYK 
 
E.O. 12958: N/A 
TAGS: EPET EFIN ECON ENRG PREL UP
SUBJECT: UKRAINE: GAZPROM MAKES GOOD ON THREAT--REDUCES GAS 
TO UKRAINE BY 25% 
 
REF: A. KYIV 461 
     ¶B. KYIV 451 
 
Sensitive but Unclassified.  Not for Internet Distribution. 
 
¶1. (U) At 9:34 a.m. Kyiv time, NaftoHaz press officials told 
us that the state-owned gas pipeline operator Ukrtranshaz had 
received an official telegram from Gazprom confirming that 
gas supplies to Ukraine would be reduced by 30 million cubic 
meters (mcm) per day for an unspecified time.  The 
announcement came two days after Prime Minister Yuliya 
Tymoshenko told the press she was sure there would be no 
cut-off.  Gazprom spokesman Sergei Kupriyanov emphasized that 
although Gazprom had ordered the 25% reduction of gas to 
Ukraine, European supplies would not be affected.  He noted 
that Ukraine's inability to solve the outstanding gas debt 
and the fact that new contracts between Gazprom and NaftoHaz 
have not been signed resulted in the cut-off, adding that 
Gazprom was still ready to continue talks with the Ukrainians 
(ref B). 
 
¶2. (SBU) As news of the gas reduction spread in Ukraine, 
NaftoHaz officials pledged that the reduction in gas would 
not affect European or Ukrainian consumers.  NaftoHaz 
official Valentyn Zemlyanskiy stated that transit volumes 
were not affected and reserves from underground storage 
facilities would be used to cover gas consumption in Ukraine. 
 Ukraine's daily consumption in the winter normally averages 
about 280 mcm.  With winter ending, energy experts 
hypothesize that current consumption is likely closer to 180 
mcm per day. It appears that the 30 mcm Gazprom reduced today 
corresponds to a 25% reduction in gas, which suggests that 
Ukraine had been receiving about 120 mcm per day from 
Gazprom.  Energy experts we spoke to explained that a 25% 
reduction would trigger an automatic lifting of gas from the 
underground storage facility to offset Gazprom's reduction 
and ensure that neither Ukrainian nor European consumers are 
short-changed.  They estimated that there is enough gas in 
Ukrainian underground storage facilities to cover 280 mcm 
(estimated average winter consumption) for 1.5 months. 
(Comment:  What is not clear who owns the remaining gas in 
Ukraine's storage -- most presume the lion's share is held by 
Gazprom, RUE, or UkrHazEnergo.  If Ukraine uses this gas, it 
will need to compensate the owners sooner or later.) 
 
¶3. (SBU) While there were some panicky rumors running around 
of a complete shut-off of gas to consumers (which did not 
even happen in January 2006), Prime Minister Tymoshenko 
assured consumers they could count on gas supplies.  She also 
announced it would be a priority for her government to enact 
energy-saving measures to prepare Ukraine for the next 
winter.  A few short term fixes are also conceivable. 
Individual municipal heating facilities could also reduce the 
amount of gas consumed as well, for example by reducing 
marginally temperatures in buildings, which is unlikely to 
pose severe dislocation, as Kyiv's temperatures remain in the 
40s..  Pro coalition politicians have called the recent 
cut-off nothing more than Russian political pressure, 
designed to force the Ukrainians to make gas deals with the 
Russians on their terms.  NaftoHaz promised to send a 
delegation to Moscow by the end of this week for another 
round of talks. 
Taylor