Ukraine Seeks Restoration of Direct Turkmen Gas Supplies

KIEV, February 13 (RIA Novosti) – Ukraine wants to restart direct natural gas deliveries from Turkmenistan, Ukrainian President Viktor Yanukovych said on Wednesday after talks with his Turkmen counterpart Gurbanguly Berdymukhamedov and signing of a memorandum of understanding to broaden oil and gas cooperation.

Ukraine could join Turkmenistan in developing alternative gas supply routes both for domestic Ukrainian consumption and export to Europe, Yanukovych said.

“I confirmed Ukraine’s interest in resuming natural gas supplies from Turkmenistan and readiness for closer cooperation in this field,” Yanukovych was quoted as saying by the Ukrainian UNIAN news agency.

Ukrainian Energy and Coal Industry Minister Eduard Stavitsky, who was present at the talks in Ashgabat, said the agreement signed on Wednesday would help implement projects to deliver Turkmen gas to Europe.

Turkmen gas could be delivered to Ukraine through a gas pipeline in northern Turkmenistan, Stavitsky said.

Turkmenistan, which holds the world’s fourth-largest gas reserves, supplied Ukraine with 36 billion cubic meters of natural gas annually until 2006. Ukraine paid for that gas with cash and bartered for goods. Turkmenistan halted gas deliveries to Ukraine after a spat between the two ex-Soviet republics over gas prices and Ukraine’s failure to pay for Turkmen gas on time.

Kiev has recently been trying to diversify its gas supply sources away from Russia because of a dispute with Moscow over pricing. Ukraine has in particular sought to alter the terms of a controversial gas deal it signed with Russia in 2009, which includes a “take-or-pay” clause committing it to buying set amounts of gas, and has pushed for both price and contracted volume cuts.

Turkmenistan currently supplies the bulk of its gas to Russia’s Gazprom, which sells it on to third parties, under a 25-year deal signed in 2003. In December 2009, Gazprom Export and Turkmengaz signed amendments to that long-term gas purchase and sale contract. The price Gazprom paid Ashgabat for its gas was set by the same amendment, and since January 1, 2010 the gas price has been calculated under a formula linked to gasoline product prices, according to Gazprom.

A new arrangement with Kiev would allow Ukraine to buy spare Turkmen gas resulting from falling demand from Gazprom, which has in turn recently experienced falling demand from its main European customers.


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