Ukraine Pipeline Explodes

A fiery explosion in central Ukraine cut a gas pipeline serving EU customers in central Ukraine on June 17, the day after Russia cut all gas supplies to Ukraine itself in a dispute over payment arrears.

The explosion at about 2 p.m. local time blew a column of flame 650 feet high in a remote area of the Poltava region in central Ukraine, local officials said. Despite the pyrotechnics, Ukrtransgaz, which operates the pipeline, said the fire was put out in less than two hours. Supplies to Europe were quickly shunted to a parallel pipeline.

Eustream, the Slovakian operator of the pipeline to European customers, confirmed that the western flow were uninterrupted. The Eustream line transfers gas from Russia through Ukraine to Slovakia, and from there, to Hungary and Romania.

Russia and Ukraine are locked in a dispute over how much Russia is charging Ukraine for gas. The morning of June 16 was the deadline for Ukraine's gas company, Naftogaz, to pay nearly $2 billion of the more than $4 billion it owes for past deliveries of gas. Naftogaz, didn't meet the deadline, and supplies to Ukraine were immediately cut, though gas for Europe continued to pass through Ukraine.

Kiev argues that Russia is using the dispute to inflict further harm on Ukraine's already weak economy and to raise worries in Europe about its gas supplies. They say this is an effort to apply leverage on Ukraine over the separatist rebellion in the east of the country.

Related Article: Moscow and Kiev: A Dialogue Of The Deaf

The explosion in central Ukraine was about a kilometer from the nearest village, Iskovtsy, local police said, and no injuries or deaths were reported.

Ukraine's Energy Ministry issued a statement suggesting the explosion could have been a "terrorist attack." But Svetlana Pibalko, a spokeswoman for Ukraine's Emergency Situations Ministry, said it was the interior ministry's duty to determine that. Ukraine's interior minister, Arsen Avakov, said several causes were being considered.

One potential cause would be neglect of the pipeline by Naftogaz. Kiev has previously been accused of lackluster maintenance. Last month, prosecutors conducted a criminal probe into another pipeline explosion in western Ukraine, but concluded that sabotage, not neglect, was a more likely cause.

By Andy Tully of Oilprice.com