Reconciliation at the airport

Yushchenko and Tymoshenko agreed on the gas issue

The agreement between Gazprom and Naftogaz signed in the middle of last week seems to have reduced the degree of tension between the Ukrainian president and prime minister. On Friday, Yulia Tymoshenko, in accordance with the new protocol of meetings of the highest official of Ukraine after official visits, was waiting for the return of Viktor Yushchenko from Poland. And immediately after the plane landed at the Kyiv airport, the prime minister, with the support of Naftogaz Chairman of the Board Oleg Dubina, made a report on the agreements reached with Gazprom. Following the meeting, the press service of the President of Ukraine reported that Viktor Yushchenko and Yulia Tymoshenko, who have been stealing the initiative for gas negotiations from each other for two months, positively assessed the agreement signed in Moscow.

On March 12, the heads of Gazprom and Naftogaz, Alexey Miller and Oleg Dubina, signed an agreement on the development of cooperation. The document describes the conditions for processing already supplied gas (in January-February) and establishes a new formula for supplying Ukraine, but only until the end of 2008. It was decided that Naftogaz will pay the Ukrgazenergo company for 5.2 billion cubic meters of Central Asian gas. And from March 1, it will purchase gas directly from RosUkrEnergo, and after the Swiss trader pays off its debts to Gazprom, from Gazprom Export. At the same time, the gas price remained at the previously agreed level of $179.5. In turn, the Russian monopolist will have the opportunity to supply 7.5 billion cubic meters directly to industrial consumers in Ukraine this year. But the main thing is that the agreement sets out Kyiv’s obligation to secure this quota for Gazprom on a long-term basis.

At the initiative of the Ukrainian side, the text of the agreement contains a clause that it comes into force immediately after its approval by the Cabinet of Ministers of Ukraine. And before the meeting with Viktor Yushchenko, Mrs. Tymoshenko expressed optimism about this. At a press conference, she said that she expects a positive decision on the gas agreement to be made this coming Wednesday.

“We will discuss this issue and send a letter to Russia stating that we accept the position. If the government has comments, we will send them to Gazprom so that they are taken into account,” Ms. Tymoshenko said. And she directly stated that it was she who was not entirely satisfied. According to her, Gazprom’s right to sell at least 7.5 billion cubic meters applies only to 2008. “The obvious things are here: the agreement was concluded for one year, and all obligations under it will end after the year ends,” says the prime minister. True, the text of the agreement states that Naftogaz is obliged to conclude a long-term contract with a company authorized by the Russian concern for the sale of 7.5 billion cubic meters of gas starting from April 1. At the same time, Naftogaz will have to resell this volume with a symbolic markup of 1 cent per thousand cubic meters compared to the price on the border of Russia and Ukraine.

The press service of the Ukrainian president also emphasized this. “In agreement with the Russian side, a number of fundamental issues remain,” the press release says. -- In particular, the balance and price of imported gas for Ukraine for 2008 and subsequent years, the conditions and procedural format of work on the Ukrainian market of a subsidiary of Gazprom OJSC. On this matter, the negotiation process will continue in the near future at the level of business entities and governments of both states.”

This means that the agreements between Gazprom and Naftogaz may again be in jeopardy. The Russian concern did not comment on the statements of Ukrainian politicians. But it is clear that guarantees of a long-term presence in the Ukrainian market for industrial gas consumption are the main and fundamental provisions of the agreement with Naftogaz. This means that retreat on this issue is tantamount to losing the gas confrontation, which has been dragging on since the beginning of the year.

Alexey GRIVACHS