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Azarov: High Russian gas price will force Ukraine to turn to coal

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Jan. 14, 2012, 2:04 p.m. | Ukraine — by Kyiv Post Staff
Ukraine could sharply cut down on increasingly expensive Russian natural gas imports, switching to domestic coal more as a fuel if Moscow refuses to renegotiation an existing supply agreement, Ukraine's Prime Minister Mykola Azarov said according to a Jan. 13 Interfax-Ukraine news report. “Speaking of using coal instead of gas, when gas costs $416 [per 1,000 cubic meters] as it does now, coal use is appropriate and economically justified. But if the gas price goes down and will be, for instance, $220, then using coal as opposed to gas will be inefficient,” Interfax-Ukraine quoted the prime minister as saying.

Ukraine has set the task of seriously cutting the consumption of expensive Russian natural gas in 2012. Already a meeting has been held to decide who will be in charge of what, “and the work got under way in full swing,” Azarov added.

In 2010-2011, the government was seriously focusing on coal industry development, and in 2011 Ukraine reached a coal surplus of 5 million tons.

Ukraine aims to switch, where possible, to its own fuel: coal and alternative sources, the prime minister said.

At the same time, Ukraine is set to continue talks with Russia to reduce the price of its natural gas, he said.

“On the one hand, we persist in talks with Russian partners, and on the other, we are preparing the country to manage such a gas price,” Azarov said.

Ukraine increased coal production in 2011 by nearly 9 percent to 82 million tons and plans to further boost extraction in 2012 to 84 million tons.
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