Ukraine Gas Chief Says Contracts Signed to Cover Shortfall

The head of the Ukrainian state gas company has said contracts have been signed to cover the shortfall resulting from Gazprom’s decision to cut its gas supplies to Ukraine. Speaking after reporting on the issue to the cabinet, he admitted though that the price of the additional gas supplies has not yet been agreed. The following is the text of report by Interfax-Ukraine news agency:

Kiev, 11 July: The national company Naftohas Ukrayiny has signed contracts to buy 6bn cu.m of gas from the Transneft company (Russia) and another 5bn cu.m from RosUkrEnergo (registered in Switzerland).

“We have signed two additional contracts. One is to receive 6bn cu.m from the Russian company Transneft and another 5bn from RosUkrEnergo. This is more than enough to cover our needs, there will in fact we a surplus,” said Oleksiy Ivchenko, the first deputy energy minister and chairman of the board of Naftohas Ukrayiny. He was speaking in Kiev on Monday.

Commenting on statements by RosUkrEnergo that the terms of the additional gas supplies to Ukraine have not yet been agreed, Ivchenko said that “this is a separate issue”. “We want to buy cheap, they want to sell dear – this is a working issue, and we are negotiating.”

He said the report about the company’s activities which was delivered at a cabinet session today was an “interim working report”.

[Interfax-Ukraine at 1253 gmt quoted Economics Minister Serhiy Teryokhin as saying that the cabinet has told Naftohas Ukrayiny to produce the originals of the contracts by Wednesday to clarify the price issue. "We do need the gas but not at any price," Teryokhin was quoted as saying.

The need to procure additional gas supplies arose after the Russian gas giant Gazprom, a key gas supplier to Ukraine, said 7.8bn cu.m of its gas had gone missing from Ukrainian underground storage facilities, and said it would cut the amount of gas supplied to Ukraine this year commensurately. Ukraine denies that the gas has gone missing. Gazprom itself has offered to supply the additional gas but at a much higher price than what Ukraine is paying now.]