Ukrainian Gas Official Details Deal With Russia for 2006

Excerpt from report by Interfax-Ukraine news agency

Kiev, 6 January: The national joint-stock [oil and gas] company Naftohaz Ukrayiny will continue paying with natural gas for the services of [gas intermediary] Rosukrenergo A.G. (Switzerland) for delivery of Turkmen gas from the Turkmen-Uzbek border to the Russian- Ukrainian border, Naftohaz’s first deputy board chairman, Andriy Lopushanskyy, has said.

Lopushanskyy was addressing journalists today.

“I would not like to make comments, but I will say one thing… [ellipsis as published] We have agreed with [Russia's gas monopoly] Gazprom – 1.6 for 2006, but we have retained the conditions of 2005 with Rosukrenergo, that is, 37.5 and 1.09. We have not raised the rate, there is no mirror reflection. This situation is very beneficial to Ukraine,” Lopushanskyy said.

He therefore explained that the rate of payment for transit of gas belonging to Gazprom through Ukraine in 2006 would rise to 1.6 dollars per 1,000 cu.m. per 100 km, but the rate of payment for transit of gas transported by Rosukrenergo through the Russian Federation would remain for Naftohaz Ukrayiny at the previous level – 1.09 dollars per 1,000 cu.m. per 100 km. Meanwhile, Naftohaz Ukrayiny will give Rosukrenergo 37.5 per cent of gas transported to the Russian-Ukrainian border as payment for delivery of Turkmen gas, as was the case in 2005.

Lopushanskyy also said that the contracts between Naftohaz Ukrayiny and Rosukrenergo for delivery of Turkmen gas were amended to incorporate the increased volume of gas from 36bn to 40bn cu.m.

[Passage omitted: Gazprom and Naftohaz Ukrayiny signed the gas deal on 4 January.]

Therefore, Rosukrenergo in 2006 can receive up to 15bn cu.m. of gas on the Russian-Ukrainian border as payment for delivery of Turkmen gas to Ukraine, while Naftohaz Ukrayiny can receive up to 25bn cu.m. of gas under the contract with [Turkmen state gas monopoly] Turkmengaz.

Lopushanskyy also said that the rate of payment of 1.6 dollars per 1,000 cu.m. per 100 km for transit of gas belonging to Gazprom through Ukraine, and also the volumes of transit for 2006 were fixed in the annual supplement (1GU-06) to the contract between Naftohaz Ukrayiny and Gazprom on the volumes and conditions of transit of Russian natural gas through Ukraine for the period between 2003 and 2013 dated 21 June 2002.

[Passage omitted: background to the creation of Rosukrenergo]