Fears of another Ukraine gas row in 2009

Ukraine has avoided a repeat of last week’s cuts by agreeing a 2008 price for the Central Asian gas it gets from Russia’s Gazprom. But experts claim another row could come in 2009 – when Kazakhstan, Turkmenistan and Uzbekistan double their gas

Gazprom is hailing Thursday’s deal with Naftogaz as a victory for both sides. Its Ukrainian counterpart will pay a reduced 179 dollars per thousand cubic meters for Central Asian gas through Russia to the end of the year.

Naftogaz meanwhile will pay Gazprom near the EU price of 315 dollars per thousand cubic meters for the Russian gas it used in January and February.

“The debt for January and February has been a sore point in all our other negotiations with Naftogaz, so we’ll sign a contract allowing them to pay us back not in money but in gas. However our Central Asian colleagues have told us they’ll supply us at European prices from 2009, and that will change the price we charge Ukraine,” announced Gazprom spokesman Sergey Kupriyanov.

Ukrainian President Yuschenko however immediately questioned the validity of the deal.

“We had no agreement with President Putin on this new price for 2008. It triggers some concerns of mine because it is unprecedented. It is very important for lawyers to give their response to this,” he said.

Experts say Central Asian suppliers, which provide much of Ukraine’s gas through Russia, could force Gazprom to up the price from the current 179 dollars.

“China is very interested in the idea of exporting gas so it’s no accident that this week when a lot of attention is being focused on Russia’s negotiations with Ukraine the Central Asians have come up and said ‘OK, from 2009 we’re going to have that European gas price as well. I think they’re in the strong bargaining position,” believes Simon Pirani from the Oxford Institute of Energy Studies.