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Ukraine, Russia solve gas price dispute before winter
By Anya Tsukanova
AFP
KIEV
Petroleumworld.com 10 25 06
Ukraine and Russia reached agreement Tuesday on a compromise gas price, opening the way to reduced tensions between the two countries and an easing of European concerns about the reliability of Russian energy supplies.
The Russian-Ukrainian companies RosUkrEnergo and UkrGaz-Energo signed a deal on deliveries of Russian natural gas in 2007 at a price of 130 dollars (103 euros) per 1,000 cubic metres, according to a joint statement.
"We have reached agreement," Russian ambassador Viktor Chernomyrdin earlier told reporters in Kiev during a visit to the Ukrainian capital by Russian Prime Minister Mikhail Fradkov.
The price of 130 dollars per 1,000 cubic metres of Russian gas marks an increase on the current 95 dollars that Ukraine pays, but is less than a demand for 230 dollars per 1,000 cubic metres that the Gazprom energy giant had sought 10 months ago.
A Gazprom spokesman contacted by AFP in Moscow declined to comment on the deal.
Ukraine and Russia's disagreements over gas have been at the centre of a crisis in relations and prompted Moscow to briefly cut off supplies to Ukraine at the start of this year, leading to knock-on disruption of supplies across Europe.
The question of gas prices is also a critical one for Russian-Ukrainian relations, as nearly all of Ukraine's energy imports come via Russia.
The recent problems have prompted greater attention to energy security on the part of European Union leaders, who met with President Vladimir Putin last week in Finland to discuss the issue.
Eighty percent of Russian gas supplies to Europe pass through Ukraine.
Commenting on the deal on Tuesday, Ukrainian Prime Minister Viktor Yanukovych said: "We have received confirmation by telephone that the negotiations have finished in Moscow, that the volume of gas deliveries to Ukraine will increase to at least 55 billion cubic metres, at a price that will not exceed 130 dollars."
Analysts said earlier that the relatively good deal for Ukraine would come at a political price, with Moscow expecting pro-Russian Yanukovych to continue efforts to slow or reverse the pro-Western course launched by "orange revolution" leader President Viktor Yushchenko.
The Ukrainian edition of the Russian economics weekly Expert said earlier that Yanukovych was "sending Moscow all possible signs of loyalty" and that this had been well received.
Russia's Kommersant newspaper said earlier that one demand may be that Ukraine hold an early referendum on the country's entry into NATO -- an outcome that could scotch Yushchenko's ambitions for NATO membership due to currently low levels of public support.
Moscow is also pushing for an extension of the lease of the Black Sea fleet base in Crimea, which expires in 2017.
The Ukrainian business weekly Kontrakty said that Ukraine may struggle not to lose control over its gas pipeline network, which has long been eyed by Gazprom, while Expert reported there had been "secret promises" from Kiev on selling the Russians shares in unidentified industrial assets.
On Tuesday, Kommersant reported on a possible counter-move by Ukraine aimed at enlisting northern neighbour Belarus in resisting Russian influence.
The head of gas transit company Ukrtransgaz, Yaroslav Marchuk, held talks in Belarus last week aimed at reaching an eventual deal by which Kiev would send to Belarus gas supplied by the Central Asian state of Turkmenistan, Kommersant said.
Belarussian officials, themselves involved in complex gas negotiations with Moscow, denied that such a deal was being discussed, Kommersant said.
AFP 24 1611 GMT 10 06
Copyright ©2006 AFP. All Rights Reserved.
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