Ukraine may greenlight joint gas transportation with Russia

Ukraine may reportedly allow Russia into its gas transportation system in return for lower prices. The price Ukraine pays for Russian gas has been a bone of contention for the two countries and this may bring them a step closer to better energy relations.

The Ukrainian authorities are ready to let Russia control the
main gas pipeline, while the Ukrainian East European fuel and
energy company (Vetek) will oversee local gas distribution,
according to a Kommersant Ukraine source. Problems with holes in
Ukraine’s budget, and falling demand for steel are the main reasons
Ukraine agreed to concessions, the source added.

“We are ready to accept the conditions of the Russian party
in return for lower gas prices, when Gazprom becomes a key
consortium player and its rights are fixed up by law,”

Kommersant Ukraine quoted its sources.

A Russian-Ukrainian consortium for the management of the
Ukrainian gas transport system will be in Kiev’s interests, the
first deputy speaker of the Ukraine parliament Igor Kaletnik said
in an interview with the Zerkalo Nedeli weekly published on

Such a consortium will make it possible to get “cheaper gas
and to increase the efficiency of Ukrainian companies,”

Kaletnik added.

According to Kaletnik, the Communist Party, which he represents,
is ready to support the decision to set up such a consortium but on
condition that “a mechanism is provided to keep the Ukrainian
gas transport system in the ownership of the state.”

Russia and Ukraine have been negotiating over a joint consortium
based on the Ukrainian gas transportation system for about six
months. Uniting the transportation systems will see a cut in the
price of gas to Ukraine to about $260 — 280 per a thousand cubic
meters. Russia has always been reluctant to sell its gas to Ukraine
cheaper, Valery Yazev, the first deputy head for natural resources
at Russia’s State Duma, now says lower gas prices for Ukraine may
come about, should the choice become about losing the Ukrainian
market. Gazprom is keeping the gas price as high as
possible for Ukraine as it has to make a profit, but if there is a
chance to lose the contract, it’ll make a small allowance for
Ukraine, Yazev explained.

In the 1Q 2013 Ukraine’s Naftogaz paid $406 per thousand cubic
metres for Russian gas.

This article originally appeared on: RT