Waiting for Tymoshenko

Russia and Ukraine agreed on gas prices for 2008

The Minister of Fuel and Energy of Ukraine, after an almost two-week pause, returned to Moscow yesterday for negotiations with Gazprom on gas prices . And, contrary to expectations, on the very first day the parties agreed on the price of gas on the Russian-Ukrainian border for 2008 - it turned out to be equal to $179.5 per thousand cubic meters. At the same time, Gazprom agreed to increase the transit rate of its gas through Ukraine by 10 cents (up to $1.7 per thousand cubic meters per 100 km). True, at the same time, the tariff for transporting Central Asian gas through Gazprom pipes for Ukrainian needs will be symmetrically increased (also up to $1.7). Gazprom did not disclose any other details of the agreement. According to Vremya Novostey's sources, the corresponding additions to the existing contracts should be signed this morning.

It seems very likely that the rush to approve gas prices for Ukraine for 2008, to the detriment of completing the entire set of negotiations on prices for the medium term (which Gazprom insisted on), is connected with political events in Kyiv, where the “orange coalition” of the Yulia Tymoshenko Bloc and “ Our Ukraine - National Self-Defense" is about to form a new government. In this case, Ms. Tymoshenko will more than likely become the new prime minister, with whom it will be difficult for the Russian concern to conduct a dialogue, to put it mildly. The presence of signed contracts for 2008 should be a good basis for building relations with the new government.

Deputy Chairman of the BYuT Alexander Turchynov yesterday already called the agreements with Russia regarding the price of gas for Ukraine “national treason.” He recalled that both Prime Minister Viktor Yanukovych and Minister of Fuel and Energy Yuriy Boyko promised to keep the price of gas at no higher than $160 per thousand cubic meters. “It’s strange to me that they agreed on almost $180, and this is without VAT, without internal transportation, etc. That is, at such an initial price, many enterprises will be forced to buy gas at $200 per thousand cubic meters,” he said. “If the price for transit is fixed within the framework around which negotiations took place, then this can only be called national treason.” Ms. Tymoshenko herself told Interfax late yesterday: “This (the approved price for gas. - Ed. ) is a consequence of an absolutely brainless policy, when Rosukrenergo was launched as an intermediary.” “Of course, if our team comes to power,” Yulia Tymoshenko continued, “we will do everything to ensure that Ukraine and Russia have the opportunity to work without any intermediaries.”

Nevertheless, the price level approved yesterday for Ukraine was obvious after Gazprom agreed to Turkmenistan’s conditions to increase gas prices from $100 to $140 (on average for next year). 42 billion cubic meters of Turkmen gas form the basis of imports of blue fuel for the needs of Ukraine. The price is formed according to the principle of “purchase costs, transit costs plus profit margin for the supplier.” As is known, this role is played by the Swiss trader RosUkrEnergo, which purchases Turkmen (as well as Uzbek and Kazakh) gas from Gazprom. According to RUE, the margin in this scheme in 2007 is 2-3 dollars per thousand cubic meters. That is, at the current level of transit tariffs, its cost to the point of gas delivery to the Ukrainian side does not exceed $26-27. An increase in the rate on the Russian section will not significantly affect the final price of gas.

However, Gazprom does not yet have agreements with Uzbekistan and Kazakhstan for 2008. Yesterday, the vice-president of the Kazakh state-owned company Kazmunaigas, Daniyar Berlibaev, said: “We are currently negotiating with Gazprom about changing the tariff rate for our territory.” But he did not indicate the level of his claims. According to Vremya Novostei, the current rate in the Central Asian republics is $1.1 per thousand cubic meters per 100 km. And if it is brought to the Russian-Ukrainian level ($1.7), the costs for this item will increase by one and a half times.

However, the new price for Ukraine already includes this possibility. After all, it is higher than the purchase price of Turkmen gas by $39.5 per thousand cubic meters, and not by $30, as it is now. And now the question is how these “extra” 9.5 dollars will be divided between Gazprom, transit countries and RUE.

Alexey GRIVACHS