USD 92.5919

+0.02

EUR 100.2704

-0.14

Brent 86.51

+0.82

Natural gas 1.727

+0.01

664

Ukraine's moves for Central Asian gas

Ukraine has put in a repeat request for free access to some Russian pipelines which would enable it to ship in cheaper gas from Central Asia, a possibility met with scepticism by some analysts.

Ukraine's moves for Central Asian gas

Ukraine has put in a repeat request for free access to some Russian pipelines which would enable it to ship in cheaper gas from Central Asia, a possibility met with scepticism by some analysts. Kiev, which imports up to 60% of its gas needs, had bought the fuel from Turkmenistan and Uzbekistan before a pricing row in 2006, after which Russia monopolised the sales of gas from the Central Asia states, according to a Reuters report. All imports of gas to Ukraine pass through Russian territory. "Ukraine was pushed out from the (Central Asia gas) market. We are not staking out demands but we want to return to this issue and to discuss it," Ukraine President Viktor Yanukovich told Russian counterpart Dmitry Medvedev at a business forum.

From 2006 till last year, Ukraine had been importing mostly Central Asian gas exclusively from a Swiss-based trader RosUkrEnergo, whose chairman Dmytro Firtash was present at the meeting on Tuesday during the Russian president's visit to Kiev. Industry watchers had criticised the middlemen schemes of gas supplies to Ukraine dubbing them non-transparent, while Kiev had been asking Moscow to allow it to ship gas from Central Asia using Russian pipelines. In January 2009, when Europe was left without Russian gas for about two weeks after yet another and more severe row between Moscow and Kiev, RosUkrEnergo was eliminated from the chain of Russian gas shipments to Ukraine. Since the election of Yanukovich in February, ties with Moscow have rapidly and steadily improved with accords on gas pricing and a lease extension for a key Russian naval base on Ukraine's Crimea peninsula already signed.

Russia has agreed to a 30% cut in the price for its gas for Ukraine -- a boon to Kiev's struggling economy. Seemingly on the wave of enthusiasm, Russian Prime Minister Vladimir Putin last month proposed a merger between Russian gas giant Gazprom and Ukraine's energy monopoly Naftogaz -- an offer met by disbelief and confusion in Kiev. Despite the huge pricing discount, Ukraine is still a source of hefty returns for Gazprom, which is unlikely to cede its position, Mikhail Korchemkin of think tank East European Gas Analysis said. "Ukraine is the most profitable market of Gazprom. Currently, exports to Ukraine generate $236 per 1000 cubic meters net of export duties and transit costs, compared to $155 for exports to Germany," he said. "Theoretically, it is possible to restore the freedom of transit of Central Asian gas, but not to Ukraine... Gazprom is unlikely to give any share in its best market."


Follow us on Facebook
Advertising at neftegaz.ru

Subscribe to our newsletter

of the best materials Neftegaz.RU

* Incorrect E-Mail Address

By clicking the "Subscribe" button I accept the "Agreement on the processing of personal data"


Advertising at neftegaz.ru