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YALTA, September 15 (Itar-Tass) —— Ukraine will build up sufficient gas reserves in the next 15 years to meet its domestic needs, Ukrainian Prime Minister Nikolai Azarov said.
The energy challenge is a key one for the country, he said at the 9th annual meeting “Yalta European Strategy” on Saturday, September 15.
“Ukraine does not have enough gas of its own and has to pay an enormous price for it. This is a strong noose for us as we have to empty our currency reserves and burden the people with unbearable energy prices,” the prime minister said.
“We have set ourselves the task of building up enough gas serves in the next 15 years to meet our needs. We have them and we will be able to meet our demand for oil and gas completely in the next 15 years,” Azarov said, adding that the government has proclaimed the policy of thrifty use of energy resources.
“We will halve gas consumption next year. We have already started drilling in offshore fields this year and we have signed an agreement with leading energy companies,” he said.
“We are moving over to the policy of energy independence and energy efficiency,” the prime minister said earlier.
He stressed that Ukraine will use less and less imported gas. “We must step up our own gas production and increase the share of coal in the energy balance, reduce energy intensity in industry and the housing sector to the European level,” he said.
At the same time, he confirmed that the government would continue gas talks with Russia.
“We will certainly continue the talks with our Russian partners on the annulment of the enslaving agreement, but the focus will be on our own potential and new technologies,” Azarov said.
Ukraine continues to insist on a revision of the gas agreements with Russia. The country “paid and pays an outrageous price for gas”, which “kills the Ukrainian economy”, Yanukovich said.
According to Azarov, “a fair gas price for Ukraine would be about 200 U.S. dollars per 1,000 cubic metres of Russian gas”.
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.
In 2010, Ukraine bought gas the average annual price of 337 U.S. dollars per 1,000 cubic metres.
In the first quarter of 2012, the price of Russian gas for Ukraine is 416 U.S. dollars per 1,000 cubic metres and will be 418 U.S. dollars in the second and third quarters of the year and 413 U.S. dollars in the fourth quarter.
The average annual price will be 415.77 U.S. dollars per 1,000 cubic metres. The Ukrainian budget is based on the gas price of 416 U.S. dollars.