Ukraine is counting on direct gas deliveries from Turkmenistan beginning this year, Energy and Coal Industry Minister Eduard Stavytsky said.
“We are counting on a resumption [of gas deliveries] this year,” Stavytsky said during a Wednesday press conference in Kyiv.
Turkmenistan has about ten billion cubic meters of natural gas not contracted for with Russia or other countries, and that is what Ukraine is reckoning on, Stavytsky said.
“Production in Turkmenistan is growing,” he said. “The approximate volume for delivery through Russia amounts to around ten billion cubic meters of gas,” he said, adding that negotiations are underway with Russia over the possibility of Turkmen gas transiting its territory to Ukraine. In particular, a compromise on this issue is planned in the context of a free trade zone agreement.
The amount of Russian natural gas Ukraine imports this year will depend on price, Stavytsky said.
“Negotiations are underway on price reduction, on which will depend the volume [of gas bought from Russia]. We are in tandem negotiating over diversified deliveries from Europe, so in the near future we will settle with our colleagues in Europe and in Russia on the amount of delivery to Ukraine,” he said.
As for the possible price for Ukraine on Turkmen gas, Stavytsky said that a fair price would be the spot market price less the transit component. “If we take the spot market price and deduct the transit component, then we reach a price that would be fair for Ukraine,” he said.
Ukrainian Prime Minister Mykola Azarov has said he hopes his country’s energy agreement with Turkmenistan will help in the search for a mutually beneficial form of gas cooperation with Russia. “This, in our view, will help in the search for a mutually beneficial form of cooperation in the gas sphere with [our] Russian partners,” Azarov said as he opened a Wednesday government meeting.
Thanks to direct delivery from Turkmenistan, Ukrainian consumers will be getting gas at a fair price, and the country might be able to export gas to Europe, the prime minister said.
The possibility of agreeing with Turkmenistan came about thanks to an agreement concerning a free-trade zone in the context of the Commonwealth of Independent States that envisions equal access for all parties to a gas pipeline transport agreement, he said.
The prime minister charged Deputy Prime Minister Yuriy Boiko, Energy and Coal Industry Minister Eduard Stavytsky, and Economic Development and Trade Minister Ihor Prasolov with working up the documentation needed for implementing the agreement reached during Ukrainian President Viktor Yanukovych’s visit to Turkmenistan.
Ukraine’s national oil and gas company Naftogaz Ukrainy and the Turkmen state company Turkmengaz signed a memorandum of mutual understanding last week. The aim of that document is stepping up bilateral cooperation in the field of oil and gas. The memorandum envisions the development of future cooperation on a contractual basis.
According to a Ukrainian Eurobond prospectus, the country is not counting on getting gas from Turkmenistan this year. “Since the beginning of 2006, gas has not been delivered to Ukraine under direct contracts with Turkmenistan. The government is not counting on deliveries resuming in 2013. Earlier, Turkmenistan affirmed the availability of resources necessary for arranging shipments to Ukraine. However, Turkmenistan’s position is that transit terms with Russia have to be agreed first,” the document says.
Dmytro Firtash’s OstChem Holding imported natural gas from Central Asia (Turkmenistan, Uzbekistan, and Kazakhstan) in 2011. But since last year, the company has imported Russian natural gas exclusively.
