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Ukraine may be free from dependence on Russian gas by 2020

An average annual Russian gas price for Ukraine in 2012 will reach $415.77 per 1,000 cubic meters

KIEV, June 3 (Itar-Tass) —— Ukraine may be free from its dependence on Russian gas by 2020, Ukrainian Ecology and Natural Resources Minister Eduard Stavitsky said in an interview with the edition Zerkalo Nedeli published on Sunday.

“My estimates will be correct if we stick to our plan. Calculations are simple. Ukraine consumes about 50 billion cubic meters of gas per year. The domestic production amounts to 22-23 billion cubic meters. The deficit stands at 28 billion cubic meters of gas. The baseline production scenario is 10-15 billion cubic meters on the Yuzovskaya block, and 3-5 billion on the Olesskaya block. The shallow-water shelf projects in licensed blocks of Chernomorneftegaz will yield 1-2 billion cubic meters of gas already next year and 8-10 billion cubic meters of gas in the future,” he said.

The excessive price on imported gas is slowing down the Ukrainian development, the minister said. “To put it mildly, that irritates us all. We intend to rid of this impediment,” the minister said.

Ukrainian Prime Minister Nikolai Azarov expressed a similar idea in his Facebook account posting on Friday. He said Ukraine might become an energy independent state within three to five years.

“The government is working towards energy independence of the country. Our efforts will solve the task within three to five years,” he wrote. “Ukraine will not refuse from mutually beneficial energy cooperation with Russia, yet we do not want to be 100% dependent on one energy supplier as we are now.”

According to the Ukrainian state statistics service, the country imported 44.801 billion cubic meters of gas in 2011, which was 22.4% more than in 2010. The imports cost $14.046 billion, or 49.5% more than the year before. Ukraine imported 40.002 billion cubic meters of Russian gas worth of $12.361 billion, and 4.799 billion cubic meters of Central Asian gas worth of $1.685 billion, including 1.740 billion cubic meters of natural gas from Turkmenistan, 1.532 billion cubic meters of natural gas from Uzbekistan and 1.528 billion cubic meters of natural gas from Kazakhstan.

Ukraine paid approximately $264 per 1,000 cubic meters of Russian gas in the first quarter of 2011, $295.6 in the second quarter, $354 in the third quarter, and approximately $400 in the fourth quarter.

An average annual Russian gas price for Ukraine in 2012 will reach $415.77 per 1,000 cubic meters. The Ukrainian budget 2012 is based on the gas price of $416 per 1,000 cubic meters.

Ukraine has been insisting on a review of gas contracts signed with Russia in 2009. It says the agreements put Ukraine into an unequal position.

Political negotiations are underway to start alternative gas supplies. Ukraine has repeatedly expressed its interest in gas deliveries from Turkmenistan, Azerbaijan, Qatar, the United States and other countries.

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