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Ukraine and Russia in gas negotiations

Staff writer ▼ | May 28, 2013
Ukraine's 10-year gas contract with Gazprom is costing the country $6 billion said President Viktor Yanukovych. Ukraine may now allow Russia into its gas system in return for lower prices.
Ukraine Russia gas
Ukraine Russia gasUkraine's 10-year gas contract with Gazprom is costing the country $6 billion said President Viktor Yanukovych. Ukraine may now allow Russia into its gas system in return for lower prices.


"It is killing us. These losses place a burden on each citizen of Ukraine. It's very difficult for us to accuse Russia of something. They secured their national interests. It's now their right to change the contract or not to change it. For this reason, we now need to seek ways to resolve this issue," said Mr. Yanukovych.

Ukraine is a transit state almost 70 percent of all Russian gas shipped to the European Union. The price Ukraine pays for Russian gas is a point of confrontation between two nation but now the Ukrainian authorities are ready to let Russia control the main gas pipeline, while the Ukrainian East European fuel and energy company (Vetek) will oversee local gas distribution.

"We are ready to accept the conditions of the Russian party in return for lower gas prices, when Gazprom becomes a key consortium player and its rights are fixed by law," writes Ukraine.

A Russian-Ukrainian consortium for the management of the Ukrainian gas transport system will be in Kiev's interests, the first deputy speaker of the Ukraine parliament Igor Kaletnik said in an interview.

Russia and Ukraine have been negotiating over a joint consortium based on the Ukrainian gas transportation system for about six months. Uniting the transportation systems will see a cut in the price of gas to Ukraine to $260 - 280 per thousand cubic meters. In the 1Q 2013 Ukraine's Naftogaz paid $406 per thousand cubic metres.


 

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