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Russia, Ukraine sign contract on gas supplies for 2009-2019 - 2

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Russian energy giant Gazprom and Ukrainian energy company Naftogaz signed on Monday a contract on Russian gas supplies to Ukraine for 2009-2019.
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MOSCOW, January 19 (RIA Novosti) - Russian energy giant Gazprom and Ukrainian energy company Naftogaz signed on Monday a contract on Russian gas supplies to Ukraine for 2009-2019.

Russian Prime Minister Vladimir Putin said Moscow and Kiev had reached agreement on all issues of gas transit and supplies, adding that there would be no intermediaries in Russian-Ukrainian gas relations.

Putin said Gazprom had been ordered to restart full natural gas deliveries to Europe via Ukraine.

Russia suspended supplies to Ukraine on January 1 after the former Soviet neighbors failed to agree on debt and prices for 2009. A week later, Gazprom cut off gas deliveries to the European Union, saying Ukraine was stealing gas intended for EU consumers, an accusation Kiev denied.

Putin and his Ukrainian counterpart, Yulia Tymoshenko, agreed Sunday in Moscow on a gas price for Ukraine for 2009 and gas transit tariffs. The deal would see Kiev paying 20% less than the European market price, expected to be around $450 per 1,000 cubic meters in the first quarter.

Ukraine paid $179.5 per 1,000 cubic meters of gas in 2008. Gazprom had insisted on a market price of $450 for 2009.

The Ukrainian president's envoy on energy security said Monday that Russia had proposed Ukraine pay $360 per 1,000 cubic meters of gas in the first quarter of 2009. "The price for gas offered to Ukraine is worse than for other European countries," Bohdan Sokolovskiy said.

The Ukrainskaya Pravda publication quoted Tymoshenko as saying that the average annual price for Russian gas for Ukraine would be less than $250 per 1,000 cu m. The office of Ukrainian President Viktor Yushchenko predicted on Monday that the average price for the year would be $199.

The Ukrainian prime minister said on Monday that the Russian gas transit price, which remains at its previous level of $1.7 per 1,000 cu m for 100 km, would be profitable for Ukraine.

"The transit price that remains is profitable, fine for Ukraine, as the gas price is lower than the world one," Tymoshenko said. "We have found a compromise, and it is very important."

She said Ukraine and Russia would put aside each country's claims against the other made during the gas crisis.

Gazprom earlier said it had lost more than $1.2 billion due to the suspension of gas transit to Europe via Ukraine.

Around 20 countries in Europe have been affected by the dispute, and the EU has called the cut in supplies "completely unacceptable."

Following mediation by the EU, the two sides signed a deal on monitoring gas transit a week ago to resume supplies, but deliveries did not restart, with each side blaming the other for the lack of progress.

Putin said on Monday that monitoring of Russian gas transit to EU countries via Ukraine was no longer necessary. "The [gas] transit monitoring and control scheme is unnecessary now," he said.

Tymoshenko said the agreements would alleviate all problems in the gas sphere between the two countries.

"Today we set the price for gas for the next few years and have set the price for its transit at an absolutely objective base," she said after the agreements were signed. "We will have a normal and complete process for setting prices and tariffs for transferring Russian gas to Europe."

"Ukraine will remain a dependable transit partner," she said, adding that Ukraine could save $5 billion in 2009 due to the 20% gas discount.

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