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Russian energy minister, European commissioner to meet in Berlin May 19 over gas issue

May 16, 2014, 16:07 UTC+3 MOSCOW
“We think the situation is becoming critical and urgent measures must be taken to resolve it,” Alexander Novak said
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MOSCOW, May 16. /ITAR-TASS/. Russia’s Energy Minister Alexander Novak will have a regular meeting with European Commissioner for Energy Guenther Oettinger in Berlin on May 19, the ministry’s spokeswoman has said.

The meeting will be held within the tripartite consultations over Russian natural gas supplies to Ukraine and Russian gas transit to Europe, the spokesperson, Olga Golant told ITAR-TASS on Friday.

At the trilateral consultations in Warsaw on May 2, Ukrainian Energy and Coal Industry Minister Yuriy Prodan said his country could not guarantee the storage of necessary amounts of gas during summer for further transit to Europe.

“Therefore Ukraine cannot guarantee the supply of gas to European consumers, that is, its transit in the amount that is provided for in the contracts between Gazprom and European consumers,” Novak said.

“This is very disturbing information and we think this is unacceptable. Urgent measures must be taken by both Ukraine and our European partners who are also an interested party and bear just as much responsibility for the transit of sufficient volumes of gas across Ukraine,” he said.

“We think the situation is becoming critical and urgent measures must be taken to resolve it,” he added.

According to Novak, at least 18.5 billion cubic meters of gas need to be held in underground gas storage facilities in wintertime. “Our estimates indicate that there are about 4-6 billion cubic meters of gas there now. This means that about 12 billion cubic meters of gas have to be pumped into the underground gas storage facilities in western Ukraine from May to September. That’s a rather large amount,” he said.

“The current volume of 4 billion cubic meters would not be sufficient to meet Ukraine’s own needs. Ukraine consumes about 50 billion cubic meters of gas a year. Of that amount about 20 billion are produced inside the country and 30 billion cubic meters or so are imported,” Novak said.

The throughput capacity of the Ukrainian gas transportation is 288 billion cubic meters system at the entrance and 178.5 billion cubic meters at the exit, including 142.5 billion cubic meters to European countries and 3.5 billion cubic meters to Moldova.

Ukraine’s gas transportation system consists of 72 compressor stations, 110 production shops and 1,451 gas distribution stations. The overall length of gas pipelines operated by the company is 38,600 kilometers, including 22,200 kilometers of trunk pipelines and 16,400 kilometers of extensions.

In December 2013, Russian Gazprom and Naftogaz signed an addendum to the gas agreement in effect from January 19, 2009, under which the price of Russian natural gas for Ukraine was to be reduced by one-third to $268.5 per 1,000 cubic meters from January 1, 2014, compared to $410 per 1,000 cubic meters in the fourth quarter of 2013.

Moscow and Kiev also agreed that the discount would remain in effect as long as the key conditions were met, specifically timely payments for current supplies and repayment of debts.

At the end of the first quarter of 2014, Gazprom said it would have to raise the price of gas for Ukraine by more than $100 to $385.5 per 1,000 cubic meters because Ukraine had failed to pay the debt for the gas delivered in 2013 and had not made payments for current supplies.

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