Ukraine's government today upped the ante in its natural gas conflict with Russia, informing the Kremlin's ongoing gas shipments to Europe might well be "confiscated " according to DPA. The absence of a contract between Russia and Ukraine for gas deliveries and transfers onward to Europe makes any gas shipped by Russia into Ukraine technically "of unknown origin," and so subject to confiscation by the Ukrainian government, wrote Oleh Dubina, chairman of Ukraine's Naftogaz Ukrainy gas trading company. Russia cut off gas supplies to Ukraine on January 1 because of slow Ukrainian payment of debt, and as a negotiating tactic. The initial Ukrainian response was to bar Gazprom auditors from inspecting natural gas levels within Ukraine, effectively taking hostage gas stored in Ukraine by Gazprom for later shipment to Europe. As much as 4 billion cubic metres of Gazprom-owned gas - fuel worth some 16 billion dollars at prevailing European prices - are stored in Ukrainian reservoirs, according to Ukrainian energy industry estimates. Talks between Russia and Ukraine on a new natural gas transfer contract failed on December 31, after which Russia declared Ukraine in a gas embargo.
