Ukraine to further cut Russian 2013 natgas imports as talks fail
Kiev (Platts)--26Nov2012/734 am EST/1234 GMT
Ukraine will further cut imports of Russian natural gas next year after
recent negotiations in Moscow have failed to lower gas prices, President
Viktor Yanukovych said.
Ukraine will cut gas imports from Russia to 18 billion cubic meters in
2013 from 20 billion cu m earlier planned, Yanukovych said.
"There is only one leverage we can use to influence the situation,"
Yanukovych said in comments released by his press service over the weekend.
"It is further reducing the imports of Russian gas."
It is the second time in the past 10 days that Ukraine has significantly
lowered its forecast for Russian gas imports next year, highlighting the
problems in gas price negotiations.
Article continues below...
|Request a free trial of: European Gas Daily|
European Gas Daily is a flagship Platts publication that delivers crucial competitive intelligence across the entire European gas marketplace. It keeps you ahead of critical price changes and their effects on the industry -- to help you make informed market decisions.
Ukraine imported 40 Bcm of Russian gas in 2011, and has recently lowered
its forecast of gas imports to 26 Bcm in 2012, down from 27 Bcm earlier
The announcement comes days after Prime Minister Mykola Azarov held gas
price talks in Moscow with his Russian counterpart Dmitry Medvedev at which
he later said little progress had been made.
Ukraine has for more than two years been unsuccessfully trying to
persuade Russia to lower natural gas prices to $250 per 1,000 cu m from about
$432/1,000 cu m currently.
In response, Ukraine has decided to sharply cut gas imports from Russia
while at the same time seeking to diversify its energy imports.
Earlier this month, Ukraine began importing natural gas from Germany
through existing natural gas pipelines via Poland. The imports, supplied by
RWE, are supposed to rise to at least 5 Bcm in 2013, according to government
Further highlighting disagreements with Russia, Yanukovych left on
Sunday for a visit to the Middle East, including to the United Arab Emirates
The visit, which will end in Qatar on Wednesday, is expected to increase
cooperation in the energy sector as Qatar is expected within three years to
become a major supplier of liquefied natural gas to Ukraine.
"Without any doubts the visit to Qatar will boost mutual cooperation in
trade, economic, energy and other sectors," Andriy Honcharuk, head of the
foreign department at the Yanukovych administration, said.
Energy and Coal Industry Minister Yuriy Boyko said earlier this month
that Ukraine in three years will be importing natural gas from three sources,
including Russia, Germany and Qatar -- taking 5-7 Bcm/year from each.
NO CUSTOMS UNION
Yanukovych's remarks also show that Ukraine has rejected Russia's recent
proposal to join the Customs Union, a Moscow-led trade bloc that includes
Russia, Belarus and Kazakhstan.
Joining the Customs Union would derail Ukraine's European integration
and place the country firmly into Moscow's orbit for years to come.
Trying to lure Ukraine to join the alliance, Moscow suggested that Kiev
will be able to buy natural gas at $160/1,000 cu m after joining the Customs
Union, according to Azarov.
Medvedev and Azarov discussed the Customs Union at their talks in Moscow
Yanukovych said earlier that Ukraine may increase cooperation with
Russia, Belarus and Kazakhstan without joining the Customs Union, calling
such cooperation the "three plus one" formula.
But Moscow rejected the formula, insisting on Ukraine's full membership.
--Alexander Bor, firstname.lastname@example.org
--Edited by Jeremy Lovell, email@example.com