Saturday, 20 March 2010

Ukrainian delegation to visit Russia seeking softer gas deal

Ukrainian delegation will travel to Moscow next week for a revision of contracts on imports and transit of natural gas with Russia seeking a lower price.

The high-level delegation will begin its week-long visit of Russia on Monday.

Addressing a news conference Friday, Ukrainian Prime Minister Mykola Azarov said the existing contract was "unprofitable for Ukraine."

According to him, the high natural gas price, the high rate of energy consumption, and the low level of payments for consumed natural gas are the three major problems of Ukraine's energy sector.

The new Premier sounded optimistic of Ukraine's chances in the wake of enlivened relations with the neighboring country after Victor Yanukovych was elected President last month, edging out Yulia Tymoshenko in the presidential run-off

During his visit of Brussels within days of his inauguration, Yanukovych promised European Union that his government would guarantee the safe transit of Russian natural gas to Europe in future.

Yanukovich's Party of the Regions is allied to the Kremlin's United Russia party, and the 59-year-old former mechanic has pledged to seek better relations with Moscow, as Ukraine transits Russian natural gas to other parts of Europe.

Relations between Moscow and Kiev over gas supply are followed closely by Europe because Ukraine is a key transit point for Russian oil and gas supplies to many European countries.
In January last year, Russia halted all gas shipments to Europe via Ukraine for two weeks amid a dispute over unpaid bills and new prices, resulting in a fuel crisis in European countries in the height of winter.

Russia doubled the gas price it charges Ukraine after the dispute was solved.

Ukraine currently pays about $305 per 1,000 cubic meters of Russian gas.

In December, Moscow agreed to a 30 per cent increase in the transit tariff for oil piped to Europe through Ukraine, avoiding interruption in supplies.

Ukraine has been paying for Russian gas without dues for the past few months.

Ukraine is due to pay $700 million next month for natural gas it imported from Russia this month, 15 per cent more than it paid in February.

It plans to import 27 billion cubic meters of Russian natural gas in 2010, according to the natural gas production and distribution balance for this year.

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