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Ukraine Gas Price Nears Crisis Level
Gazprom has set the price for natural gas for Ukraine next year at $179.5 per 1000 cu. m., up from $130 this year, which will cost Ukraine an additional $2.71 billion for a total of $7.2 billion. A raise in the transit price of gas by $0.10 per 1000 cu. m. per 100 km. will bring Ukraine $2.65 billion, however. A higher selling price in Turkmenistan and plans by Kazakhstan and Uzbekistan to reconsider their selling prices was the justification for the price hike. Ukraine is buying less than 50 billion cu. m. of gas this year, and next year's volume has not been agreed on yet.
A Ukrainian source says that negotiations between Gazprom head Alexey Miller and Ukrainian Minister of Fuel and Energy Yury Boiko yesterday morning with Gazprom proposing $180 per 1000 cu. m. and without changing the price of transit. The Ukrainian side countered with a proposal to raise the price of transit from $1.60 to $1.70 per 1000 cu. m. per 100 km. and lower that price $1-3. Negotiations lasted five hours. The minister was ready to leave when Gazprom offered a raise of $0.10 in the transit price. That concession led to a concession of $0.50on the price of gas and an agreement. A week ago, the price of $147.40 was mentioned as agreed upon, while Gazprom deputy chairman talked about $160 per 1000 cu. m.
Central Asia is the source of 73 percent of Ukraine's gas. Under a January 4, 2006, agreement, the price of that gas is strictly tied to the selling price in Central Asia. In November, Gazprom signed an agreement with Turkmenistan to but gas at $130 per 1000 cu. m. in the first half of 2008 and at $150 in the second half. Uzbekistan and Kazakhstan then followed suit, with Kazakh sources saying that “individual contracts” may be signed at $190 per 1000 cu. m. On November 28, Ukrainian Minister of Economics Anatoly Kinakh stated that $180 per 1000 cu. m. would be a “catastrophic” price for Ukraine. The price of gas within Ukraine next year is now expected to be $230-240 per 1000 cu. m.
www.kommersant.com
All the Article in Russian as of Dec. 05, 2007
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