Naftogaz Offers a Gas Pricing Formula to Gazprom, Expects USD 143/tcm in 2007

According to Naftogaz’s CEO, the company proposed Gazprom fix yearly increases in gas price for Ukraine for a period of 4-5 years. He also said that next year the price will increase to USD 143/tcm (+10%) at most (our most recent forecast was USD 140/tcm). Gazprom representative, Kupriyanov, replied that they principally agree, but have to study the issue in more detail. Vladimir Nesterenko: This Naftogaz initiative is what we have been waiting for, as our position remains that the predictability in the gas supply price and volume is much more important than the size of price itself. A long-term gas pricing plan would significantly reduce the level of uncertainty in Ukraine’s economy and trigger investments.