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2 Jan, 2009 09:08

Ukraine gas dispute moves into post cutoff stage

Naftogas of Ukraine and Gazprom have moved to contingency plans after supplies to Ukraine were shut off following the failure to reach an agreement on a 2009 contract.

Talks via radio and television. Ukrainian negotiators who left Moscow on December 31 have still not returned to the table with both parties to the dispute left to broadcast their versions events through the mass media. Gazprom Spokesman Sergey Kupriyanov wasn’t backward in questioning the rationale or intentions of Kiev.

“The main problem at the moment is not the debt which has not been paid for gas delivered last year, and not even the absence of an agreement on specific points of the contract. The main problem is that our Ukrainian counterpart can't sign a contract because they have no intention to do so. It is in their interest to delay the process in order to create a conflict situation.”

Ukrainian authorities say the latest price offer for 2009 gas – $250 per thousand cubic meters – is too expensive. Naftogaz Ukrainy says it's ready to pay $235 per thousand cubic meters. Oleksiy Hudyma, the energy advisor of the Ukrainian Prime Minister, says if $250 is the price then transit fees for Russian gas going to Europe across Ukrainian networks need to go higher as well.

“Together with the increase of the price of gas, the price for transit should be increased as well. the current price is 1.7 dollars per thousand cubic meter for 100 kilometers. Ukraine wants it to be increased to the average European level. Transit fees of $1.7 are too little if we are to pay $250.”

Meanwhile Naftogaz Ukraine has started taking gas from underground gas storage facilities in order to meet domestic demand according to spokesman Valentin Zemlyansky.

“Ukraine has begun using its own stored gas. That’s about 200 million cubic meters a day, plus there’s 58 cubic meters a day of domestic gas extraction. This means that we had to reorganize the supply for Ukrainian gas consumers based on our own gas reserves. European gas consumers have not been affected as transit gas has not been taken.”

Independent representatives have been coming to entry and exit points of Ukraine's gas transportation network to monitor Russian gas transit to Europe. Several European consumers say they have not experienced shortages in supplies. Existing underground gas reserves, they say, will last through a currently mild winter in the event of shortages.