Gazprom announces the establishment of two joint companies with Nafotgaz

Yesterday Russia’s gas giant announced the creation of two joint companies with Ukraine’s Naftogaz. According to Gazprom Head Alexander Miller, one of these entities will focus on extraction of coalbed methane while the other will develop the Pallas field in the Black Sea shelf. In January 2010, Ukraine’s government granted Naftogaz a 30 years license to develop the Pallas field, whose 2p reserves are estimated at 232 bln cubic meters (no auction was held).In April 2010, Russian Prime Minister Vladimir Putin first voiced an offered to unite Gazprom and Naftogaz, suggesting to unite Russian gas wells with Ukrainian gas transportation assets and fields of equal value.  Since the beginning of the discussion, the Ukrainian side has been wary of hasty decisions and has emphasized the need for equal partnership with Gazprom. Yesterday’s Gazprom announcement was not confirmed by Ukraine’s Energy and Fuel Ministry, which claims negotiations are in process.