Ukraine wants $US 700 million worth of gas to resume transit

Ukraine’s Naftogaz has requested Gazprom to hand over 21 million cubic metres of gas daily if the Russian company wants transit to Europe resumed, RT’s sources in Ukraine say.

In this quarter alone the demanded gas would cost  $US 700 million.

Chronology of Russia-Ukraine gas war

The current gas cuts are the culmination of a long gas war between Russia and Ukraine, RT looks back at its latest chapter, starting back in October 2007 and the ongoing crisis, the effect of which is now being felt all around Europe.

Naftogaz has sent a draft agreement to Gazprom that would amend the contract between them. The clause says the Russian company would provide the so-called process gas that is used to power compressor stations that pump the fuel through the pipelines.
 

The current contract makes Ukraine responsible for the supply of process gas, just like other transit countries like Belarus or Bulgaria do to fulfill their obligations. Ukraine claims Russia should be the party responsible for supplying the gas.

The Ukrainian proposition suggests that Gazprom provides 360 million cubic metres of gas in January and 600 million cubic metres in February and March. According to Naftogaz, it will ‘secure proper transit of the Russian natural gas to European consumers’.

According to Gazprom representative Sergey Kupriyanov, however, the necessary process gas should be provided by the transporting party and that Gazprom “does not have any obligations to provide the Ukrainian part with this gas.”

He said that if Ukraine cannot do it for any reason, it can purchase the gas from either Gazprom, or from a third party.

Earlier, when Slovakia offered Ukraine credit to pay for the process gas, the latter said that it did not need it as Russia had always delivered technical gas by itself.

The cost of the gas which Ukraine demands in January alone is about $US 160 million in market prices.

Russian President Dmitry Medvedev has demanded that Ukraine compensates $US 1.1 billion losses in export contracts Gazprom has born due to the halt in supplies.

Here is a full translation of the document:

AGREEMENT
ON MEASURES FOR ENSURING THE TRANSIT OF RUSSIAN
NATURAL GAS ACROSS THE TERRITORY OF UKRAINE

_________ ___January, 2009

The National Joint Stock Company “Naftogaz Ukrainy”, Ukraine, hereinafter called Naftogaz Ukrainy, in the person of the First Deputy Chairman of the Board, I. N. Didenko, acting on the basis of the power of attorney dated 2.01.2009 No.141-346, on the one hand,
And
The Open Joint Stock Company “Gazprom”, the Russian Federation, hereinafter called Gazprom, in the person of Deputy Chairman of the Board, V. A. Golubev, acting on the basis of the power of attorney dated 29.11.2006 No. 01/0400-631d, on the other hand, named together, THE PARTIES,
In order to ensure proper transit of Russian natural gas across the territory of Ukraine for European consumers in accordance with the terms in the Contract between the National Joint Stock Company “Naftogaz Ukrainy” and the Open Joint Stock Company “Gazprom” on volumes and terms for transiting Russian natural gas across the territory of Ukraine in the period from 2003 to 2013 dated 21 June, 2002,
have concluded the given Agreement as follows:
1. In order to ensure the transit of Russian natural gas in 2009, Gazprom transfers to the ownership of Naftogaz Ukrainy natural gas for technological needs.
The transfer of natural gas shall be carried out in the general flow of gas entering Ukraine’s gas transport system at the border of the Russian Federation/Ukraine in the volume of 21 million cubic metres of natural gas daily, in the following volumes:
– January 2009 – 360 million cubic metres;
– February 2009 – 600 million cubic metres;
– March 2009 – 600 million cubic metres.
2. In the shortest time possible, THE PARTIES pledge to sign a Contract on deliveries given in Item 1 of volumes of gas, moreover, the terms in the Contract shall contain a provision granting Naftogaz Ukrainy the right to return the natural gas that was transferred for technological needs. The validity of the Contract shall be applicable to THE PARTIES as of January 1, 2009.
3. The given Agreement shall come into force as of the moment it is signed.

Signatures of THE PARTIES:

On behalf of NJSC                                                     On behalf of OJSC
“Naftogaz Ukrainy”                                                           “Gazprom”

_______________I. Didenko                            _____________V. Golubev

Yushchenko says his word

In another development, Ukrainian President Yushchenko said that Kiev is ready to transport Russian gas to Europe if Russia supplies the full amount, which is about 300 million cubic metres of gas daily.

He made the statement at a media briefing at the Polish President’s residence, RIA Novosti news agency reports.

“If Gazprom daily supplies 300-310 million cubic metres of gas to Europe’s consumers, Ukraine guarantees that even without a transit contract we will deliver that gas to Europe,” Yushchenko said.

This equals the full amount of gas Russia was supplying to Europe through Ukrainian transit routes before Ukraine shut all four pipelines on January 7 2009.

Also, Yushchenko says that $US 450 for a thousand cubic metres of gas – Gazprom’s price on the table to Ukraine – is not a ‘market price’.