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Archive for December 30th, 2005

Russian action to be clear and decisive

Posted by the Editor on December 30, 2005


News / 30 December 2005 | 14:20

Russian action to be clear and decisive

Russian action to be clear and decisive

Russia will cut off gas supplies to Ukraine at 7 a.m. GMT January 1 if no contract is signed with the country, the chief executive of natural gas monopoly Gazprom said Friday, RIA Novosti informed.

“If Ukraine does not sign the contract for gas supplies in the hours remaining until the New Year, Russian natural gas supplies for Ukrainian consumers will be stopped at 10 a.m. Moscow time [7a.m. GMT],” Alexei Miller told the NTV television channel. “The actions will be clear and decisive.”

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Ukraine to pay $65 per 1,000 cubic metres of Turkmen gas

Posted by the Editor on December 30, 2005


News / 30 December 2005 | 14:00

Ukraine to pay $65 per 1,000 cubic metres of Turkmen gas

Ukraine to pay $65 per 1,000 cubic metres of Turkmen gas

Turkmenistan will deliver 40 billion cubic meters of gas at a price of $65 per 1,000 cubic meters, Turkmen President Saparmurat Niyazov confirmed.

He said, as a result of the talks in Ashkhabad, Ukraine and Turkmenistan agreed to work on establishing joint ventures to develop energy resources of the right bank of the Amudarya River. According to RSN, the price of the Turkmen gas for Ukraine under the agreement signed is about $50 for 1,000 cubic meters. It is equal to the price Ukraine paid to Russia in 2005, Regnum informed.

Gazprom wants to raise the gas price for Ukraine almost five times and promises to cut off the gas supplies, if they do not manage to agree until the New Year.

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The excerpts from the transcript of the meeting on deliveries of Russian gas to Ukraine

Posted by the Editor on December 30, 2005


News / 30 December 2005 | 13:40

The excerpts from the transcript of the meeting on deliveries of Russian gas to Ukraine

The excerpts from the transcript of the meeting on deliveries of Russian gas to Ukraine

PRESIDENT VLADIMIR PUTIN: Good afternoon, dear colleagues!

I would like to hear, I would like to listen to what you agreed on to resolve the problem that caused our Ukrainian colleagues and friends to come to Moscow yesterday.

IVAN PALCHKOV: Dear Vladimir Vladimirovich!

First of all I would like to thank you for this meeting and for giving us your time, and to pass along Viktor Andreevich [Yushchenko]’s best wishes for the coming New Year.

VLADIMIR PUTIN: Thank you.

IVAN PALCHKOV: Over the past two or three months experts from Naftogaz of Ukraine and Gazprom have discussed in detail various possibilities for our new energy relations concerning gas deliveries and gas transit. Today Gazprom’s experts are continuing work on the report, which determines the basic principles for the transition to new energy relations. We propose that such a transfer take place by 2006. Figures on the balance sheet, the volume of gas being sent through, and the volume of gas delivered to Ukraine to settle the balance will correspond with the agreements and contracts we have reached. Today we discussed the issue of increasing the possibilities of using Ukraine’s gas transport system, creating a joint venture to exploit gas in Ukraine together, and sharing our underground storage facilities.

The only issue that remains unresolved is prices.

<>

VLADIMIR PUTIN: I would like to hear from the Russian side. Will the contract be signed or not?

VIKTOR KHRISTENKO: Today the only figure that neither party doubts is the possible volume of gas that could be delivered to Europe. This figure is no less than 110 billion cubic metres. The parties have not yet reached an agreement on any of the other figures-neither on the volume of deliveries nor on the prices.

VLADIMIR PUTIN: In this case I am quite worried about the deliveries of gas to Ukraine. I have no doubt that both Russian or Ukrainian parties are responsible enough so that nothing will interfere with the delivery of Russian energy to western consumers. But of course, in this case I would very much like to hear a more optimistic answer regarding gas deliveries to Ukraine, especially for Ukrainian consumers. I understand that the final agreements have not yet been reached.

VIKTOR KHRISTENKO: Up until now there aren’t any. Naturally we are ready to deliver gas to Ukrainian consumers. The problem lies with the agreement on prices, which has not yet been achieved.

VLADIMIR PUTIN: This is very bad, especially bad because already in March of this year with the President of Ukraine, Viktor Andreevich Yushchenko, we agreed on the transition to a market-based regime for payments in energy including

in the gas sphere. Since March there has been enough time to resolve all the necessary issues both at the level of government and at the level of corporations. Since March there has been plenty of time for this. It is simply surprising. You-I am now addressing Russian and Ukrainian participants in this meeting-have created a real crisis, and not only in the energy sector. This is like a crisis between two countries. This is very bad.

After all we recognize the fact that the market price is the benchmark European rate for last year and not the Ukrainian rate because we have never had market-based relations with Ukraine in this sphere. I think that this is perfectly clear to experts.

We are not going to talk about these formulas now even though they are well understood and, I repeat, clear-it is simply mathematics. They are linked to diesel oil and other kinds of energy resources. But what can we do about deliveries to Ukraine? Today this worries me most of all.

Incidentally, I completely agree with Viktor Andreevich [Yushchenko] that we must depoliticize this issue as much as possible, absolutely as much as possible. It is also necessary to arrive at a solution at the professional level as soon as possible. We simply don’t have any time. We must stop all press campaigns on this issue, and here I am addressing all participants in the process. We must stop frightening each other with our nationalists because if Russian and Ukrainian nationalists get together and want to celebrate New Year, travel to Paris, London or Brussels, either way they will not receive vodka, pickles, sausages, or bacon free of charge. In Kiev Russian representatives should not count on anything that is not market-based and in Moscow our Ukrainian partners should proceed according to market rules. And, by the way, it seems to me that only cooperating within a market-based regime will permit normal good relations between our countries in the future. Because only when we feel full independence, including economic independence, can we build normal intergovernmental relations. Our Ukrainian colleague has said that our Ukrainian partners consider a transition period necessary.

You know perfectly well what has been happening in this sphere over all these years. I am not speaking now about Russian investments in the Ukrainian economy over the last few years which are measured in billions of dollars. But let’s not go into that.

I simply want to tell you how lacking in transparency all this business has been over the last decade. All the barter, calculating gas at an undetermined price, considering some kinds of gas but not others, lack of clarity concerning to whom and how it is sold, and the volume that is re-exported-all this must be stopped. However, and of course I agree with you, we are in the process of developing our relations and should never put each other in a difficult situation.

Certainly we should give our Ukrainian partners the possibility of drawing up a budget and developing the economy in a way that would enable them to adapt to market-based relations. We are changing to market-based relations with practically all of our partners, both in Transcaucasia and the European part of the former Soviet Union-it’s the same for everyone.

Resolving the issue of decoupling internal Russian gas prices and Belarussian gas prices was a very difficult decision. We have done this. We shall also build further market-based relations with all countries, including Belarus. There we were in relatively familiar territory-we gave our Belarussian colleagues a loan to cover the difference between internal Russian prices and the prices at which we started to sell gas to Belarus. It is not comparable with the volume of financial resources required by Ukraine because in the Ukrainian case we expect it would be more than three billion dollars, more precisely three billion six hundred million dollars. Even on a Russian scale that’s a huge sum. We shall find this money and we are ready to offer either part or all of the necessary financial resources to our Ukrainian partners. If you want the full amount, certainly the loan will be given under market conditions but with as favourable a rate as possible. We understand that there are budgetary issues here and we do not want to put the Ukrainian budget in difficulty. I understand what a budgetary process is. We are ready to give a commercial loan directly to your company, Naftogaz of Ukraine. Of course it would have to be guaranteed by a first-rate American or European international bank. I hope that today the leadership of Ukraine is in a condition to receive such a guarantee.

For our part, it will require changes in the budget we just accepted. But I am confident that the overwhelming majority of Russian citizens will approve of such a step for Ukraine and that I can convince the deputies of the State Duma to make the necessary changes to the Russian budget.

<>

 
ALEKSEI IVCHENKO: On behalf of Naftogaz of Ukraine I would like to assure you that Naftogaz will rigorously fulfil the conditions of our contract with Gazprom concerning sending Russian gas to Europe. For our part we will not violate the terms of the contract in any way.
 
 

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Kyiv could up price for Russian Black Sea Fleet in gas dispute

Posted by the Editor on December 30, 2005


News / 30 December 2005 | 13:20

Kyiv could up price for Russian Black Sea Fleet in gas dispute

Kyiv could up price for Russian Black Sea Fleet in gas dispute

Prime Minister of Ukraine Yuriy Yekhanurov said Friday that Kiev could raise the rent Russia pays for naval bases on the Black Sea if the price of Russian natural gas supplies to Ukraine increases.

In comments that echoed recent statement by the Ukrainian leadership, Yekhanurov told a caller-in on a radio station that the rent hike would be a natural move, RIA Novosti informed.

Yekhanurov, however, ruled out any revision of the agreement on the Russia’s fleet stay in Ukraine.

“We are not reviewing any agreements,” he said, adding that the situation should not be politicized.

The prime minister also said that the matter concerned the appropriate use of property. “We do not want anybody, either in Ukraine or in Russia, to misuse anything, taking advantage of the situation,” he said.

The move comes against the backdrop of a bitter dispute between Russia and Ukraine over the price for Russian natural gas and transit fees for Russian gas to Europe via Ukraine.

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President of Russia congratulates President of Ukraine

Posted by the Editor on December 30, 2005


News / 30 December 2005 | 13:00

President of Russia congratulates President of Ukraine

President of Russia congratulates President of Ukraine

President Putin sent his warm congratulations to President Yushchenko and all citizens of Ukraine.
 
In particular Volodymyr Putin wishes the coming year be the year of fast friendship and mutual understanding, Kremlin’s press office told.

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Hungary is worried over gas conflict between Ukraine and Russia

Posted by the Editor on December 30, 2005


News / 30 December 2005 | 12:40

Hungary is worried over gas conflict between Ukraine and Russia

Hungary is worried over gas conflict between Ukraine and Russia

Hungary

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Ukraine and Russia try to solve gas problem again

Posted by the Editor on December 30, 2005


News / 30 December 2005 | 12:25

Ukraine and Russia try to solve gas problem again

Ukraine and Russia try to solve gas problem again

Today Russian energy giant Gazprom and Ukrainian national gas company Naftogaz are to continue their attempts to solve a bitter dispute over natural gas supplies and transit, RIA Novosti told.

With the clock ticking before Gazprom’s January 1 deadline arrives, the two sides are set for decisive talks over the Russian concern’s decision to raise prices for natural gas to Ukraine to market levels if there is any chance of preventing its threat of turning off the taps to the neighboring country becoming a reality.

Russia and Ukraine failed to reach any agreement on Thursday. Russia offered a $3.6-billion loan to help Ukraine cover its expenses during the move to market prices, but Ukrainian leader Viktor Yushchenko rejected it, saying the country should “pay for itself.”

The dispute between Russia and Ukraine on supplies and transit of natural gas reached it peak after Gazprom proposed selling natural gas to Ukraine for $220-$230 per 1,000 cubic meters and threatened to cut off the supplies if Ukraine refused to sign a revised contract. Ukraine currently pays about $50 per 1,000 cubic meters under a barter agreement.

Although Russian President Vladimir Putin subjected senior managers in the two countries’ energy sectors to some stinging criticism Thursday – he all but accused them of creating a crisis in bilateral relations – Gazprom seems to be sticking to its guns.

Echoing previous statements from the monopoly’s leadership, spokesman Sergei Kupriyanov said the company would cut off the supplies of natural gas to Ukraine on January 1 if the parties failed to reach an agreement. “It is possible, and the tests that we conducted last week clearly confirmed it,” he said on Russian TV.

He said the Ukrainian proposals did not reflect the current market situation and prices on the European markets.

“They pay more than $250 everywhere,” he said. “The $65 or $80 offer is completely out of market range.”

In turn, Ukraine has said it will raise the transit fees Gazprom has to pay to send its gas to crucial European markets from $1.07 to $3.5 per 1,000 cu m per 100 km for the transit of Russian natural gas to Europe via Ukraine.

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President of Ukraine invites Turkmenbashi to Kyiv

Posted by the Editor on December 30, 2005


News / 30 December 2005 | 12:03

President of Ukraine invites Turkmenbashi to Kyiv

President of Ukraine invites Turkmenbashi to Kyiv

President Yushchenko invited Niyazov to pay an official visit to Kyiv at any time Turkmenbashi chose.

The representatives of Ukrainian delegation handed Yushchenko’s invitation personally to Turkmen President Saparmurat Niyazov. The delegation consists of Naftogaz Vice-President Volodymyr Petruk and Interbudmontazh President Anatoly Chizhov.

Ukrainian guests on behalf of the government of Ukraine expressed thanks to Turkmen President for steady attention to the development of Ukrainian-Turkmen relations which was proved by the bilateral agreement on Turkmen gas supply. Turkmenistan will supply 40 milliard of gas to Ukraine in 2006.

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