Sunday 30 August 2009

Ukraine eyes gas direct from Central Asia

ASHGABAT, Aug 25 (Reuters) - Ukraine wants to bypass Russia in its natural gas supplies from Central Asia and hopes to start talks with Turkmenistan soon on direct purchases, Ukraine's envoy to the Central Asian state said in an interview.

"Turkmenistan, a key exporter, and Ukraine, a key importer, could initiate talks on direct purchases," Viktor Maiko, Ukraine's ambassador to the Caspian nation, told Reuters. "That would be fair and logical."
Most of Ukraine's gas imports come from Russia which buys the commodity from Turkmenistan -- Central Asia's biggest exporter. Kiev, which has often rowed with Moscow over gas prices and supplies, has long sought to change the arrangement.
"We are ready to start three-way talks (including Russia) on the possibility of starting direct purchases of Turkmen gas. ... Perhaps that could involve 10-15 billion cubic metres of gas (a year)," Maiko said.
He did not elaborate on the details and did not say how it would be technically possible to supply gas directly to Ukraine since Russian gas monopoly Gazprom buys most of Turkmen gas production and controls its exports routes.
Turkmenistan itself has said before it remains committed to its earlier gas delivery agreement with Russia until 2025.
Ukrainian President Viktor Yushchenko and Russia's Dmitry Medvedev are both expected to visit Turkmenistan next month for talks certain to focus on natural gas supplies.
Turkmenistan itself, its budget dependent on Russian gas purchases, has sought to diversify exports away from its former Soviet overlord and forge closer ties with Western buyers.
Its pro-Western rhetoric has intensified since an explosion in April on a key Turkmen-Russia gas pipeline which Turkmenistan has blamed on Russia -- a charge Moscow denied.
The pipeline has since been repaired but the two sides still cannot agree on new terms of sales as Russia's Gazprom needs less gas than in the past.
Maiko said it could take up to a year to finalise a new arrangement for direct Turkmen purchases but gave no details. Turkmenistan's government could not be reached for comment.
Ukraine plays a key role in EU energy supply security, with about a fifth of Europe's gas coming from Russia via its territory, and Europe supports ways of securing steadier gas supplies.
Ukraine's latest dispute with Russia in January led to gas supplies to Europe being severed for more than two weeks.
In a blow to Gazprom, already struggling with lower prices and depressed exports to western Europe, Ukraine has cut gas imports from Russia due to a slowdown in its economy. Maiko said however that a fall in imports was temporary.
"Things are picking up already," he said. "The recession may continue for some time ... but Ukraine's main energy consuming industries such as metals and chemicals are picking up again." (Writing by Maria Golovnina)

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