4 September 2014
Ukraine’s Prime Minister Arseniy Yatsenyuk believes the average price for Russian gas supplied to Ukraine should be about USD 340/tcm. Yatsenyuk shared his calculations at a Sept. 3 presentation of the government’s action plan on renovating Ukraine. The legitimate gas price should be close to USD 385/tcm in the high season and about USD 300/tcm in the low season, he said. He also declared that Ukraine secured the possibility to import about 15 bcm of gas annually from EU countries to partially substitute its import needs from Russia (Ukraine’s total 2013 gas imports were 28.0 bcm).
The day before, Ukraine started importing gas from Slovakia via a new connection of total annual throughput capacity 9.9 bcm of gas. The price at which Ukraine buys gas from Slovakia is below Gazprom’s offer of USD 385/tcm, according to Naftogaz CEO Andriy Kobolev.
According to the presented government’s action plan, Ukraine is also going to start concluding gas transit agreements with EU-based gas traders and persuade them to shift the point of purchase for Russian gas to the Russian-Ukrainian border, instead of the Ukraine-EU border currently.
Russian PM Dmitry Medvedev responded the same day, stating that his side is ready to discuss with Ukraine the possibility of seasonal prices for Russian gas, but in any case the average gas price should be closer to USD 385/tcm, according to the Interfax news agency. Medvedev also stressed that any cooperation with Ukraine in the gas sector is possible only after repayment of existing debt for gas, which “reached an astronomic number.” Depending on price assumptions, Russia’s total claim against Ukraine ranges between USD 4.5 bln and USD 5.0 bln. Recall, Russia stopped supplying its gas to Ukraine since June 16, as the two sides failed to reach any agreement on the price of gas and terms of payment.
Alexander Paraschiy: Talks between the Ukrainian and Russian sides on the gas issue, where the parties can exchange their ideas and reach some agreement, are possible not earlier than next week. The sides, therefore, have enough time not only to defend further their view on prices, but also change their view. We do not see any prospects for Ukraine and Russia to agree on solving their gas dispute.
Thus far, the best and cheapest way for Ukraine to secure some supplies of Russian gas at an “affordable price” is to persuade EU-based traders to buy Russian gas at the Russia/Ukraine border. We expect all the efforts of the Ukrainian government will be focused on these attempts.