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Deputy PM: Ukraine faces gas shortages
Journal Staff Report

KIEV, Aug. 17 – Ukraine faces a massive shortage of natural gas this year and the government scrambles to arrange extra gas supplies before the winter begins, a senior government official said Thursday.

Andriy Kliuyev, the deputy prime minister for the energy sector, said Ukraine faces the deficit of 8 billion cubic meters of gas, or more than 10% of the country’s annual demand.

“We can clearly say that we currently have the deficit of about 8 billion cu m of natural gas,” Kliuyev said at a press conference. “We have difficulties in gas supplies, difficulties in making payments, difficulties in the financial position of Naftogaz Ukrayiny.”

This is the first time a senior government official has disclosed the actual level of the looming gas shortage after previous government had suggested the problem had been solved.

The disclosed figure is somewhat less than had been earlier estimated by analysts that had been predicting the deficit at between 11 billion cu m and 14 billion cu m in 2006.

The government confirmed the country faces the major gas deficit two months before the high demand season begins on Oct. 15 when the country’s gas consumption usually accelerates.

It leaves the government with little time to actually try to arrange the extra gas supplies in order to prevent sweeping gas shortages during the winter.

Ukraine, which consumes about 76 billion cu m of gas annually, produces domestically 20 billion cu m of gas and needs to import about 56 billion to meet the demand.

RosUkrEnergo, the only gas supplier to Ukraine, pledged to deliver 32 billion cu m of gas in 2006, while the government had been also planning to import about 24 billion cu m directly from Turkmenistan.

But Turkmenistan suspended gas shipments to Ukraine on Jan. 1, citing gas debts and the lack of throughout capacity in a pipeline that goes via Uzbekistan and Russia to Ukraine.

Most of the pipeline capacity is thought to be controlled by RosUkrEnergo, a Swiss-registered gas trader that is thought to be controlled by Gazprom and by some well-connected individuals.

The fact that the deficit is estimated at 8 billion cu m, not 24 billion cu m, shows that Ukraine has been using gas from its underground gas tanks earlier this year to weather a gas dispute with Russia.

But it may also suggest that RosUkrEnergo has been actually quietly increasing gas supplies to Ukrainian underground gas tanks without making an official announcement.

Kliuyev said the government has been working on arranging extra gas supplies and setting prices for Ukrainian consumers, and said the results of the talks will be shortly announced.

“In the near future, you will learn about the volumes [of extra supplies] and final prices,” Kliuyev said. “We are working out technical details.” (jp/ez)




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