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                        FRIDAY, MARCH 1, 2024
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Gazprom to probe Ukraine natgas imports
Journal Staff Report

KIEV, March 31 Gazprom on Saturday pledged to investigate reports of Ukraine starting alternative imports of natural gas from Europe after alleging the country may have been using a fraudulent scheme.

Ukraine, which has been rapidly reducing imports of Russian gas over the past year, on Thursday started imports of European gas via Hungary, a move that may further cut imports of Russian gas.

But Gazprom CEO Alexei Miller alleged Ukraine has been probably still using a Russian gas, which had been originally aimed at the European markets. He called the practice a virtual reverse.

"There are no de-facto and physical reverse supplies planned, but what is planned is to use Gazprom's gas through some virtual reverse," Miller told Rossiya-24 state Russian television. "This is reminiscent of some fraudulent schemes. This needs to be investigated."

Ukraine, a transit route for more than half of Russian gas shipped to the European Union, wants to pay less for gas from Russia because it says a 2009 deal with Moscow set an exorbitant price, and aims to buy more gas from Europe.

Ukraine on Thursday began importing natural gas via a gas pipeline in Hungary, making it the second route for the countrys imports of European gas, Prime Minister Mykola Azarov said.

The move, which Azarov called a very big event, underscores Ukraines persistent efforts to reduce imports of Russian gas and to increase imports of gas from elsewhere in order to secure greater energy independence.

Ukraine since November 2012 has been importing a small amount of European gas via a pipeline in Poland, but the Hungarian route offers a greater capacity.

The Hungarian pipelines have capacity to move up to 5 billion cu m/year of gas to Ukraine, while the Polish pipelines - after a 6-month upgrade - will be able to move up to 2 billion cu m/year, according to Energy and Coal Industry Minister Eduard Stavytskiy.

The two routes combined will be able to move up to 7 billion cubic meters of natural gas from Europe in 2013, Stavytskiy said.

All European gas supplies are carried out according to an agreement signed between Naftogaz and Germany's RWE in May 2012. The agreement calls for supplies of 5 billion cu m of gas in 2013 with the possibility of eventually expanding volumes to 10 billion cu m/year.

Ukraine was purchasing gas at $380/1,000 cu m in Europe in the first quarter, compared with $406/1,000 cu m in Russia in the first quarter of 2013, according to Stavytskiy.

The Russian price includes a $100/1,000 cu m discount that Moscow offered in April 2010 in exchange for the Russian Black Sea Fleet navy continuing to station its ships in Ukraines Sevastopol through 2047.

Without the discount, Ukraine would have to pay $506/1,000 cu m of the Russian gas the first quarter, according to a 10-year agreement singed in January 2009.

Ukraine planned to cut Russian gas imports to 18 billion cu m in 2013, down from 24.9 billion cu m in 2012 and 40 billion cu m in 2011, according to the energy and coal industry ministry. (tl/ez)

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