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New Russia-Ukraine gas agt to serve as basis for further cooperation-diplomat

December 05, 2011, 23:29 UTC+3
These agreements will not contain any “integration formats”
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KIEV, December 5 (Itar-Tass) —— New gas agreements between Moscow and Kiev can law the “legal groundwork for further energy cooperation”, Russian Ambassador to Ukraine Mikhail Zurabov said.

He believes that the arrangements will be formalised not only as contracts between Naftogaz Ukrainy and Russian Gazprom but also as “agreements to be made between the governments of the Russian Federation and Ukraine”.

In his opinion, these agreements will not contain any “integration formats”.

Russia’s Gazprom and Naftogaz Ukrainy signed an addendum to the current gas purchase contract, which allows the Ukrainian company to pay for Russian gas with roubles.

Gazprom CEO Alexei Miller and Ukrainian Energy and Coal Industry Minister Yuri Boiko met in Moscowon Monday, December 5, to discuss “bilateral cooperation and noted the fruitfulness of the current dialogue”.

They “agreed that the talks on the terms of Russian gas supplies to Ukraine can be completed before the end of 2011,” Gazprom said.

On January 19, 2009, Russia and Ukraine made 10-year contracts until 2020 for the transit of Russian natural gas to Europe through Ukraine and for gas supplies to Ukraine on the basis of the European pricing formula. Under these agreements, Russian gas is supplied to Ukraine at a 20 percent discount, while the transit rate remained at the 2008 level of 1.7 U.S. dollars for 1,000 cubic metres per 100 kilometres.

On January 1, 2010, the sides switched to market gas prices. According to Russia's Gazprom, 94.6 billion cubic metres of gas were transported through Ukraine in 2010. The transit rate for the Russian gas in 2010 was 2.7 dollars for 1,000 cubic metres per 100 kilometres on the average. In the first quarter of 2011, it was raised to 2.94 U.S. dollars, and Ukraine started talking about new increases for Russia.

In 2010, Ukraine bought gas the average annual price of 337 U.S. dollars per 1,000 cubic metres. In the first quarter of the year, the price was 305 U.S. dollar per 1,000 cubic metres. On April 21, after talks between Medvedev and Yanukovich in Kharkov, Gazprom and Naftogaz Ukrainy signed an addendum to the agreement on gas supplies and gas transit to Europe of January 19, 2009. The addendum gave Ukraine a discount of 100 U.S. dollars if the price exceeds 330 U.S. dollars per 1,000 cubic metres, or 30 percent of the price.

According to the documents, the discount became effective from April 1, 2010. So, the price of gas for Ukraine was 236 U.S. dollars per 1,000 cubic metres in the second quarter of the year, 248 U.S. dollars in the third quarter, and 250 U.S. dollars in the fourth quarter.

Under the agreement reached on October 27, 2010, the price of Russian gas was about 264 U.S. dollars per 1,000 cubic metres in the first quarter of 2011, 295.6 U.S. dollars in the second quarter and 355 U.S. dollars in the first quarter. The average price of gas for Ukraine in 2011 will be 280 U.S. dollars per 1,000 cubic metres, as was projected.

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