Pricing transit gas via Ukraine at cost value ‘unreasonable’

Russia’s gas giant Gazprom believes it “unreasonable” to lower the cost of gas transiting Ukraine to its cost value, Gazprom’s Vice-Deputy Valery Golubyev told journalists on Saturday.


“This is improbable and I don’t think it’s reasonable,” Golubyev said, adding that he had not heard of any proposals or initiatives of that kind from his Ukrainian colleagues.


Ukraine seeks to alter the terms of the 2009 gas deal it signed with Russia that ties the price of gas to oil prices, which have risen steeply since then, causing Ukraine’s energy bill to balloon.


Kiev insists on a reduction in both the price and the volume of imports.


The contract says Ukraine must import no less than 33 billion cubic meters of gas from Russia. Ukraine is set to pay about $400 per thousand cubic meters of imported Russian gas in the fourth quarter of this year.


Russia annually pumps about 100 billion cubic meters of gas to European countries via Ukraine, which makes up 80 percent of its total gas supplies to Europe. The 15.5-billion-euro South Stream pipeline project is designed to cut Russia’s dependence on the Ukrainian transit system.


In August, Medvedev said Ukraine would receive a discounted price if it joined the Russian-led Customs Union or made an attractive offer to sell its gas pipeline system. However, Ukraine has balked at becoming a full member in the Customs Union, which would prevent it from signing a free trade agreement with the EU. It has offered to cooperate in a special 3-plus-1 format, but Russia rejects that idea.


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