Gazprom, Ukraine sign deal to settle gas debt –2

World

Russian natural gas giant Gazprom said on Tuesday it had reached an agreement with Ukraine on settling the country’s gas debt after a week-long dispute.

„The agreement stipulates the amount of the debt, and a plan under which the debt is to be repaid before November 1,” Gazprom said in a news release. The company said the agreement was signed after talks between Gazprom CEO Alexei Miller and Ukrainian Fuel and Energy Minister Yuriy Boiko on Monday. Last Tuesday, Gazprom threatened to cut gas supplies to Ukraine if the country failed to pay off the debt in October.

The company and Kiev have since moved to allay Europe’s concerns over Russian gas supplies via Ukraine, which were affected in early 2006 during a bitter price dispute between the former Soviet allies. Gazprom meets about 25% of the EU’s gas needs. The majority of Russian exports are transited via Ukraine. Some analysts have suggested the fresh dispute is Moscow’s attempt to pressure Ukraine to form a pro-Russian government after recent parliamentary elections in which pro-Western parties emerged with a narrow majority, or to weaken Ukraine’s position ahead of talks on 2008 gas prices.

Ukraine currently pays $130 per 1,000 cubic meters for gas pumped from and via Russia. In 2008, the price is expected to appreciate further to $143-$180. Konstantin Chuichenko, executive director of RosUkrEnergo, which is the sole supplier of Russian gas to the country, and is 50% owned by Gazprom, said on Tuesday that Ukraine would transfer the first $200 million of its debt to the company by October 22. Gas supplies have been a focus of bilateral talks during Ukrainian Prime Minister Viktor Yanukovych’s ongoing visit to Moscow.

Russian Prime Minister Viktor Zubkov told Yanukovych that the Ukrainian government should take control of the debt settlement. He also said Ukraine would transfer gas to Gazprom from RosUkrEnergo’s reserves, but did not elaborate. Zubkov said that as of the beginning of October, the debt totaled $2 billion, well above the figure of $1.3 billion previously quoted by officials. Meeting with the Ukrainian premier later on Tuesday, President Vladimir Putin said he was glad the problem had been resolved „at the level of companies and governments,” but stressed that Ukrainian consumers would now receive gas from their country’s reserves.

Yanukovych’s visit to Russia comes amid political uncertainty in Ukraine, with parties deciding on a new coalition government and premier. At talks with Putin, Yanukovych pledged stable relations with Russia, and emphasized the two nations’ historic and ethnic ties. Yanukovych was backed by the Kremlin in the late 2004 presidential race, which he lost to Viktor Yushchenko after mass protests over alleged ballot rigging. He helped reach an interim gas deal with Moscow after he became prime minister in 2006. (en.rian.ru)

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