January 7, 2009 / 12:47 PM / 10 years ago

Ukraine sets gas offer but wants no middleman

KIEV (Reuters) - Ukraine will insist on a price of $201 per 1,000 cubic meters of Russian gas for 2009, less than half Russia’s proposal, and wants to scrap a controversial gas intermediary, the state energy company’s head said on Wednesday.

A gauge shows the zero gas pressure in the pipelines at the border delivery station in the eastern Slovak town of Velke Kapusan January 7, 2009. REUTERS/Laszlo Balogh

Naftogaz head Oleh Dubyna told Reuters in an interview that Ukraine would only pay this price, up from $179.50 in 2008, if Russian gas monopoly Gazprom agreed to increase transit fees to $2.05 per tcm over 100 km from $1.70.

Dubyna will head a delegation to resume talks in Moscow with Gazprom Chief Executive Alexei Miller on Thursday.

The talks are aimed at resolving a gas contract dispute with Russia that has disrupted supplies to the European Union, which gets about a fifth of its gas from pipelines that cross Ukraine.

Gazprom has said Ukraine must pay $450 per tcm, arguing that Ukraine had rejected earlier, lower offers.

Naftogaz previously said it could pay a maximum of $235 per tcm but President Viktor Yushchenko and Prime Minister Yulia Tymoshenko then made a rare joint statement on New Year’s Eve, saying a suitable price would be $201 per tcm.

“This is the figure stated by the president and prime minister... This is a political statement so I must keep to these figures,” Dubyna said at Ukraine’s central gas distribution monitoring center.

“I cannot accept it when one side proposes a rise of $70 while transit fees remain unchanged,” he said, adding that a gas price of $250 per tcm was unacceptable to Ukraine.

Dubyna, who answers to Prime Minister Tymoshenko, also weighed into a politically charged debate over the future of RosUkrEnergo, a controversial intermediary which in 2006 became the exclusive intermediary for Ukraine’s gas imports.

He said RosUkrEnergo, which is a 50/50 joint venture between Gazprom and two Ukrainian businessmen, should be scrapped. It acts as an intermediary between Gazprom and Naftogaz.

“I don’t want to see anybody between us,” he said.

“That is my strong position — someone else can do it. I would resign and I would never sign a deal with RosUkrEnergo.”

Tymoshenko has repeatedly said RosUkrEnergo is “a corrupt intermediary” that is being protected by senior politicians. RosUkrEnergo has denied allegations that Ukrainian or Russian politicians have commercial interests in it.

WINTER GAS CUT-OFF

Dubyna said Russian claims that Ukraine had shut down export pipelines to European customers were “absurd,” as all gas taps were on Russian territory.

In a sign the cut-off may be starting to affect the Ukrainian economy, Dubyna said Naftogaz may have to reduce gas supplies to companies in the metal and chemical sectors, which together account for more than half of exports.

“We will have to reduce for a short time supplies to domestic customers,” said Dubyna, a 49-year-old former engineer.

“This will not be a full stoppage but I think we will have to reduce gas supplies to ... some metals companies and some chemical enterprises. Later, supplies will be restored.”

Ukrainian households have not yet been affected.

With temperatures in Kiev dropping below minus 20 degrees Celsius, Dubyna said the gas row had gone too far.

A pressure gauge is seen at a Ukrainian gas compressor station in the village of Boyarka near the capital Kiev January 5, 2009. REUTERS/Konstantin Chernichkin

“When you look at the thermometer and see minus 24 degrees Celsius, you understand that God help us if the heating stoves stop working,” he said. “When you think that your family may not have heat, your understanding of high-level politics ends.

“When you understand that this could lead to a big collapse then I do not understand such high-level politics,” he said, adding that Russia and Ukraine would come to a deal in the end.

“We will in any case come to an agreement. We cannot exist without each other so let’s not continue down this road anymore.”

Reporting by Pavel Polityuk; Writing by Guy Faulconbridge and Sabina Zawadzki in Kiev; editing by Philippa Fletcher

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