KIEV, August 18 (Itar-Tass) —— Ukraine has raised the transit tariff for Russian natural gas in the third quarter of 2011 to 2.89 U.S. dollars per 1,000 cubic metres for 100 kilometres.
In the first quarter of the year, the tariff was raised by 2.2 percent from the fourth quarter of 2010 to 2.84 U.S. dollars per 1,000 cubic metres for 100 kilometres.
From January 1, 2010, the transit tariff began to be calculated using the generally accepted European pricing formula. In early February 2010, Naftogaz Ukrainy said that the transit rate for Russian gas in 2010 was 2.78 U.S. dollars per 1,000 cubic metres for 100 kilometres.
The Ministry of Energy and Coal Industry told Itar-Tass that the gas transit tariff is not a fixed one and is calculated using a special formula that reflects changes in world hydrocarbon prices.
The long-term contract between Naftogaz Ukrainy and Russian Gazprom sets the base rate for the transit of Russian gas at 2.04 U.S. dollars and is charged for each 1,000 cubic metres per each 100 kilometres of transit.
In the first quarter of 2011, the transit tariff was 2.84 U.S. dollars per 1,000 cubic metres for 100 kilometres. Now it has grown to 2.89 U.S. dollars per 1,000 cubic metres for 100 kilometres.
Russian gas travels a distance of 1,240 kilometres across Ukraine before getting to Europe. According to Ukrtransgas, gas transit to Western Europe in the first seven months of this year increased by 14.46 percent to 63.851 billion cubic metres.
The Ukrainian authorities have begun a probe into the 10-year contracts for Russian gas supplies until 2020 which were made by the Yulia Timoshenko government. The ex-premier is facing charges of abuse of office when signing the gas contracts with Russia.
But the Russian Foreign Ministry said that all gas contracts were made in strict compliance with the laws of the two countries.
On January 19, 2009, Russia and Ukraine made 10-year contracts until 2020 for the transit of Russian natural gas to Europe through Ukraine and for gas supplies to Ukraine on the basis of the European pricing formula. Under these agreements, Russian gas is supplied to Ukraine at a 20 percent discount, while the transit rate remained at the 2008 level of 1.7 U.S. dollars for 1,000 cubic metres per 100 kilometres.
On January 1, 2010, the sides switched to market gas prices. According to Russia’s Gazprom, 94.6 billion cubic metres of gas were transported through Ukraine in 2010. The transit rate for the Russian gas in 2010 was 2.7 dollars for 1,000 cubic metres per 100 kilometres on the average. In the first quarter of 2011, it was raised to 2.94 U.S. dollars, and Ukraine started talking about new increases for Russia.
In 2010, Ukraine bought gas the average annual price of 337 U.S. dollars per 1,000 cubic metres. In the first quarter of the year, the price was 305 U.S. dollar per 1,000 cubic metres. On April 21, after talks between Medvedev and Yanukovich in Kharkov, Gazprom and Naftogaz Ukrainy signed an addendum to the agreement on gas supplies and gas transit to Europe of January 19, 2009. The addendum gave Ukraine a discount of 100 U.S. dollars if the price exceeds 330 U.S. dollars per 1,000 cubic metres, or 30 percent of the price.
According to the documents, the discount became effective from April 1, 2010. So, the price of gas for Ukraine was 236 U.S. dollars per 1,000 cubic metres in the second quarter of the year, 248 U.S. dollars in the third quarter, and 250 U.S. dollars in the fourth quarter.
Under the agreement reached on October 27, 2010, the price of Russian gas was about 264 U.S. dollars per 1,000 cubic metres in the first quarter of 2011, 295.6 U.S. dollars in the second quarter and 355 U.S. dollars in the first quarter. The average price of gas for Ukraine in 2011 will be 280 U.S. dollars per 1,000 cubic metres, as was projected.
After a meeting of the Committee on Economic Cooperation of the Russian-Ukrainian Interstate Commission in Sochi on April 30, Russian Prime Minister Vladimir Putin suggested that Gazprom and Naftogaz Ukrainy mighty merge their assets.
In December 1, 2010, Gazprom CEO Alexei Miller and Ukrainian Energy and Coal Industry Minister Yuri Boiko agreed to set up two joint ventures: one for the production of gas form coal seams in Ukraine and the other one for the development of the offshore Palas block in the Black Sea.
On May 24, 2011, Yanukovich said he would press for a reduction of the Russian gas price by almost 20 percent to 240 U.S. dollars per 1,000 cubic metres. But he said a merger of Gazprom and Naftogaz Ukrainy would be impossible.
According to Miller, “If an agreement is reached on a merger of Gazprom and Naftogaz Ukrainy, Russia will be able to keep the Ukrainian gas transportation system working at full capacity”.
“This will increase Ukrainian budget revenues and, most importantly, gas will be supplied to Ukraine at domestic Russian prices for both the population and industry, after the relevant agreement has been signed… Ukraine will get a serious stimulus for socio-economic development,” he said.