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Ukraine interested to get natural gas from Europe – PM

January 28, 2013, 23:02 UTC+3

He noted that Europe has no “take or pay” requirements or penalties for taking less gas than was agreed to

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KIEV, January 28 (Itar-Tass) – Ukrainian Prime Minister Nikolai Azarov said his country is interested to get natural gas from Europe as it is cheaper than that from Russia.

“Ukraine is interested in getting natural gas from Europe, which is now much cheaper than the Russian gas,” Azarov said at a meeting with a delegation of the German company Ferrostaal on Monday, January 28.

He noted that Europe has no “take or pay” requirements or penalties for taking less gas than was agreed to.

Azarov thanked Germany for support in the modernisation of the Ukrainian gas transportation system. “This is especially important for us at a time when we have an enslaving gas agreement with Russia,” he said.

The prime minister noted that the modernisation of the Ukrainian gas transportation system, which Ukraine has started together with Deutsche Bank and Ferrostaal, “is a promising project the implementation of which the government will be supported by all manner of means”.

In his opinion, the Ukrainian gas transportation system is the most reliable and least expensive gas transit way to Europe. Also, Ukraine has underground gas storage facilities that allow it to increase supply at peak demand time and thus ensure stable supply to Europe.

Ukrainian Minister of Energy and Coal Industry Eduard Savitsky said earlier that his country was studying two additional routes for reverse-mode gas supplies from Europe. “we are getting gas only from Poland for the time being, but we are working on two more routes. They will be announced shortly,” he said.

Naftogaz Ukrainy started importing natural gas

The gas is supplied across the Ukrainian border with Poland. RWE may supply up to 5 billion cubic metres of gas to Ukraine until May 2013. Last year Naftogaz Ukrainy imported 55 million cubic metres of gas using the reverse flow scheme.

Naftogaz Ukrainy has signed a contract with RWE Supply and Trading (RWE ST, Germany) for the purchase of natural gas on the border between Poland and Ukraine.

The throughput capacity of Ukraine’s gas transportation system on the Western border is about 40 billion cubic metres.

In May 2012, Naftogaz Ukrainy signed a framework agreement with German RWE Supply & Trading on the purchase of gas. The document does not state the parties’ obligations to buy certain amounts of gas, assuming that they will sign separate agreements for that.

Azarov said that Kiev was considering buying natural gas in Europe, including that from Russia, claiming that it would be cheaper to do so than to buy it directly from Gazprom.

Azarov said that “Naftogaz Ukrainy was engaged in negotiations with the German energy company RWE on the import of Russian natural gas to Ukraine from Europe in reverse mode”.

In his opinion, “this will be less expensive that buy gas directly from Russia”.

Ukraine plans to buy 10 billion cubic metres of natural gas in Europe, Naftogaz Ukrainy CEO Yevgeny Bakulin confirmed earlier.

“We are engaged in consultations on diversification of the gas market and gas purchases in Europe in the amount of 10 billion cubic metres,” Bakulin said.

“This work is at the preliminary stage,” he added.

Ukraine is also engaged in negotiations with suppliers of gas from Turkey, Romania and Germany to discuss the sale by each of them from 2 to 3.5 billion cubic metres of gas annually.

Negotiations with European suppliers were resumed after it became clear that Russia was not ready to make concessions to Ukraine on the issue of gas price reduction and is creating a gas transportation consortium.


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