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7 Jul, 2006 06:13

Seeking a deal on gas

Seeking a deal on gas

Gas transit and price issues brought newly-appointed head of Ukraine’s Naftogaz Aleksander Bolkisyov and Russian Gazprom's chief executive Aleksey Miller together for talks in Moscow.

This followed calls from within Ukraine to re-negotiate its supply deal with Gazprom. As last year closed, Russia declared it was time Ukraine paid market prices for gas. Kiev agreed to pay $95 per thousand cubic metres, almost double what it paid before.

Six months later, the Kremlin's position remains unchanged. Turkmenistan has threatened to cut off gas supplies to Russia if it rejects a 30 per cent price increase. But Gazprom says it exports most of the Turkmen gas it buys, most going to Ukraine.

Ukrainian parliamentary bloc leader Yulia Timoshenko wants to rethink the gas deal with Russia and negotiate direct with Turkmenistan. But there is only one pipeline connecting central Asia's gas fields with Ukraine, and this belongs to Gazprom. Even if Ukraine strengthened its Turkmenistan association, it would still have to reach a supply agreement with Russia.