Gazprom announces formation of joint gas venture with Ukraine

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MOSCOW, February 2 (RIA Novosti) - Russia's energy giant Gazprom announced Thursday it had formed a joint gas distribution venture, Ukrgazenergo, on a parity basis with Ukraine's national energy company Naftogaz.

"In line with an agreement on market principles of cooperation in the gas sphere concluded between Gazprom and Nafrogaz on January 4, 2006, the Ukrainian energy company and RosUkrEnergo [a gas distribution company that is half owned by Gazprom] have formed a joint venture Ukrgazenergo on a parity basis," Gazprom said in a statement.

Ukrgazenergo would be registered in Ukraine in the near future and Gazprom's Deputy Chairman Alexander Ryazanov had been elected its chairman of the board, the statement said.

The statement also said the new joint venture would primarily supply natural gas and other energy resources to Ukrainian consumers.

Gazprom and RosUkrEnergo signed a five-year contract in early January that set the initial price for Russian natural gas supplies to Ukraine at $230 per 1,000 cu m and at $1.6 for the transit of 1,000 cu m of gas via every 100km of Ukrainian territory.

The January 4 agreement between Gazprom and Naftogaz ended the gas price row between the two countries, which culminated in Russia briefly cutting off gas supplies to its former Soviet neighbor.

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