Transit constant

The head of Naftogaz of Ukraine no longer wants to increase the fee for transporting Russian gas

For the first time in many years, the head of Naftogaz of Ukraine, Oleg Dubina, said that there is no need to increase the rate on the transit of Russian gas to Europe. This is further proof of the extreme degree of politicization of gas cooperation between Moscow and Kyiv. At the beginning of the year, Prime Minister Yulia Tymoshenko, who effectively controls Naftogaz, constantly threatened to radically increase transportation fees for Gazprom.

“I am deeply convinced that we should not increase fees for gas transit through the territory of Ukraine for Gazprom, because this will lead to an even greater increase in prices for gas supplied to the domestic market,” Mr. Dubina said in an interview with the agency Bloomberg. And he stated that the increase in the price of gas supplied by Russia to Ukraine in 2009 “will not be higher than in the previous three years.” As you know, the transportation rate per 100 km is 1.7 dollars, while the average for Europe is 2.5-3 euros. In the draft Ukrainian budget for next year, recently presented by Yulia Tymoshenko’s cabinet, the price of imported gas is $260--270 per thousand cubic meters, which corresponds to a 45--50 percent indexation compared to the current $179.5. In 2007, the price increased by 30% (from 100 to 130 dollars), and since January 1, 2008 it has increased by almost 38%.

However, so far, within the framework of the negotiation process between Gazprom and Naftogaz, the principles of pricing from next year have not been determined. The fact is that until now the price for Ukraine has been growing following the appetites of the countries of Central Asia, where Gazprom purchases gas for resale on the Ukrainian market. However, as is known, in 2009 Turkmenistan, Uzbekistan and Kazakhstan will sell fuel at European prices (minus transit costs, storage and Gazprom's margin). And given the sharp rise in export prices in Europe this year, Ukraine will have a difficult time if its tight link to Central Asian gas continues. According to the deputy chairman of the board of Gazprom, Alexander Medvedev, in the third quarter of this year the price will decrease slightly, but will still be about $500 per thousand cubic meters. Transit across Ukraine of a thousand cubic meters costs about $17; it is easy to calculate that on the Russian-Ukrainian border the price will be about $480.

Naftogaz, according to Mr. Dubina, again intends to delay reaching specific agreements until the last minute - until December 31. “We may even benefit from this because gas prices are falling and this trend will continue in 2009. Therefore, we can get a more reasonable price if we conclude a contract closer to the end of the year,” explained the head of Naftogaz. The calculations given above show that the final price increase (whether it will be measured in tens or hundreds of percent) depends more on political agreements, namely on Moscow’s readiness to “untie” Ukraine from Central Asian gas or to convince Ashgabat and Tashkent to take into account the interests of Kyiv in the purchasing price formula .

Constructive relations between Vladimir Putin and Yulia Tymoshenko, which have already been extrapolated to gas negotiations, may well become the key to a gentle price - if it has come to the point that the head of Gazprom Alexei Miller a week ago took Mr. Dubina to the head of Deutsche Bank Josef Ackermann petitioned (albeit without providing Gazprom guarantees) for the renewal of a credit line of $1.5 billion for the Ukrainian concern. However, one can hardly expect that in the current situation on the global financial markets, this dedication of Mr. Miller will really help Naftogaz receive money on acceptable terms.

The price formula at which Gazprom will purchase gas from Uzbekistan from 2009 implies a discount on the cost of storing it, a source in the republic’s gas industry told INTERFAX . According to him, according to the agreement between the parties, the price of gas will be reduced by the cost of storage due to the fact that the export of Uzbek gas has a “summer profile”. That is, in the summer, supply volumes are higher, and in the winter, when demand increases, lower. According to experts, it is necessary to organize the storage of approximately 5 billion cubic meters of gas per year, which is less than a third of the volumes exported by Uzbekistan. The parties have not yet determined what cost of gas storage will be taken into account in the contract. In Europe, gas storage tariffs currently reach 120 euros per thousand cubic meters of gas per storage season. As reported, in early September, Russia and Uzbekistan agreed on a price formula for Uzbek gas. According to Russian Prime Minister Vladimir Putin, it will be based on the dynamics of prices for gasoline and heating oil. The agency's interlocutor added that a final agreement on the price of Uzbek gas in 2009 should not be expected until December.

Alexey GRIVACHS