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Ukraine to try to buy extra Russian gas
Journal Staff Report

KIEV, Sept. 12 – Ukraine on Wednesday will try to secure extra supplies of natural gas from Russia at affordable prices in the face of shortages that may strike the country as soon as next month.

Energy and Fuel Minister Yuriy Boyko will travel to Moscow on Wednesday for a meeting with Alexei Miller, the CEO of Gazprom, Russia’s state-controlled gas monopoly, the ministry reported Tuesday.

The visit comes a week after Gazprom indicated it may supply extra gas, but the parties failed to agree on prices, suggesting Boyko and Miller will focus on the issue.

Ukraine faces a shortage of up to 8 billion cubic meters of gas this year, or more than 10% of the country’s annual demand, which would affect the economy in the fourth quarter.

Ukraine last week began seeking to buy the extra gas from Russia at the current price of $95 per 1,000 cubic meters. Gazprom, which does not have an extra gas source, recently agreed to purchase up to 12 billion cu m of gas from Turkmenistan and supply this gas to Ukraine starting in October.

However, the price, which Gazprom agreed for the Turkmen gas, suggests that Ukraine would have to pay $135 per 1,000 cu m, the level that the Ukrainian officials have repeatedly said was too much.

At the talks last week, Gazprom suggested it could lower the prices for Ukraine in return for concessions from Ukraine in the energy sector. The wording of a statement from Gazprom suggested that Russia may have been seeking political considerations in return for cheaper gas in the fourth quarter, analysts said.

Gazprom has long sought to get control over Ukraine’s gas transportation network, which moves Russian gas for export to Europe and that has been by viewed analysts as one of the concessions for the lower prices.

The developments come amid reports that RosUkrEnergo, a Swiss-registered arm of Gazprom, has been actively seeking to buy seven regional gas distributors in Ukraine for $73.5 million.

The targeted assets included 42.6% of LvivGaz, 40.75% of IvanofrankivskGaz, 52.4% of ChernihivGaz and also stakes in VolynGaz, ChernotsiGaz, ZakarpatGaz and RivneGaz.

The assets are owned by Kontinium, a company owned by Ihor Yeremeyev, a close ally of Volodymyr Lytvyn, a former speaker of Parliament, according to a recent Kommersant report.

The acquisition would allow Gazprom, through RosUkrEnergo, to get control over the gas distribution assets in Ukraine that control supplies of gas to households in the area. (tl/ez)




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USD 27.41 27.27
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