Russia will provide Ukraine discounts on gas

In Kharkov, during the working visit of President Dmitry Medvedev, additions were signed to Ukraine to the contract for the supply of natural gas between Gazprom and Naftogaz of Ukraine of January 19, 2009. As part of the addition, the annual contract amount of gas in 2010 increased to 36.5 billion cubic meters. Naftogaz of Ukraine gas will be paid at a discount on the value of a reduction in export duties in gas supply to Ukraine, which is established by the Russian government. It is expected that the decrease will be $ 100 per thousand cubic meters of gas, but not more than 30 percent of the gas price, and will apply to 30 billion cubic meters in 2010, and 40 billion cubic meters in subsequent years.

The price formula and the condition "take or pay" remain unchanged. Signed additions were also canceled by contract points related to mutual penalties that were not applied in practice. An agreement was also reached that Gazprom will pay 80 percent of the cost of Gazprom gas up to the 6th day, 20 percent - in accordance with the current transit contract - until the 20th day of the next month.

The changes made to gas contracts with Ukraine do not worsen Gazprom’s economy, said the head of the gas holding Alexei Miller, commenting on new agreements. "The new conditions allowed Ukraine to raise the question, we agreed to increase the volume of gas procurement this year to 36.5 billion cubic meters. This is almost 3 billion cubic meters of gas more than the initial volume," Miller said. “This allows Ukraine to download the necessary volumes of gas into underground storage facilities, and together we calmly go through the autumn-winter period 2010-2011,” added Miller.

Earlier it was reported that Ukraine would like to receive a gas discount from Russia in the amount of $ 4 billion. According to preliminary calculations, this means that the price of fuel should decrease from the current $ 330 per thousand cubic meters to 200-245 dollars for the same volume.

In exchange for gas discounts, Ukraine is ready to offer Russia cooperation in the nuclear sector, in particular, for the construction of the third and fourth bloc of the Khmelnitsky nuclear power plant. In addition, Russia may initiate the construction of a nuclear fuel production plant in Ukraine. Vladimir Putin previously called Ukraine’s proposals “interesting”, but the details of the potential agreement with Ukraine are still unknown.

The existing gas contract was signed by Gazprom and Naftogaz with the participation of Prime Ministers Vladimir Putin and Yulia Tymoshenko in early 2009. Under this agreement, the parties pledged to calculate the cost of gas according to the formula tied to the cost of oil in the world market. The "Party of Regions" ruling in Ukraine has repeatedly criticized this document.