Ukraine wants less gas from Gazprom, talks at impasse
On 26 November, Ukrainian Energy and Coal Minister Yuriy Boiko told reporters that Kyiv has not yet officially requested up to 18bn cubic metres of gas in 2013 from Russian gas monopoly Gazprom. His was referring to a statement by Ukraine’s President Viktor Yanukovych on 23 November that Ukraine has to reduce purchases of Russian natural gas under price pressure and plans to buy 18bn cubic metres of gas from Russia in 2013. “We haven’t yet aired this figure [up to 18bn cubic metres] before our colleagues. As soon as we submit our proposal officially we’ll get a response,” Boiko said.
Yanukovych said the stronger the price pressure on Ukraine, the more Kyiv will be interested in diversifying gas supply sources, he said. “If Russia’s price policy changes for the better for us, we might gradually restore the volume of gas purchase. Otherwise we will continue reducing the amount of purchase and looking for more beneficial alternative gas supply sources,” he said.
Ukraine imported 40bn cubic metres of Russian gas in 2011, and has recently lowered its forecast of gas imports to 26bn cubic metres in 2012, down from 27bn cubic metres earlier planned.
However, Gazprom’s claims against Ukraine’s Naftogaz could reach at least $2.7bn if the latter imports only 27bn cubic metres of gas versus the contracted 33bn cubic metres, Ukrainian newspaper Kiyv Post reported on 24 November citing preliminary calculations by experts.
Ukraine has for more than two years been unsuccessfully trying to persuade Russia to lower natural gas prices to $250 per 1,000 cubic metres from about $432/1,000 cubic metres currently.
Earlier in November, Ukraine’s Prime Minister Mykola Azarov held gas price talks in Moscow with his Russian counterpart Dmitry Medvedev at which he later said little progress had been made.
In response, Ukraine has decided to sharply cut gas imports from Russia. At the same time, Ukraine has been working to tap other sources of energy. Earlier in November, Ukraine’s state-owned natural gas company Naftogaz secured a deal with Germany’s RWE to get gas. The gas will be delivered to Ukraine through Poland, by reversing one of the few lines that connect the two countries’ transmission systems.
Moreover, on 26 November Ukraine launched the construction of a liquefied natural gas (LNG) terminal close to the town of Yuzhne near to Ukrtransnafta’s oil terminal and Yuzhny port. Ukrainian Prime Minister Mykola Azarov said the construction of the LNG terminal is a real step in securing Ukraine’s energy independence. “I hail a really historic moment today, as we’ve taken the first really big step in securing Ukraine’s energy independence,” he told reporters in Kyiv on 26 November, after his participation in a video conference on the start of the realisation of the LNG terminal national project. The total cost of the project is 1.151bn hryvnias. The construction of the terminal is to be finished by 2015.
Looking for more gas sources, Yanukovych on 25 November left for a visit to the Middle East, including to the United Arab Emirates and Qatar. Qatar is expected within three years to become a major supplier of LNG to Ukraine.