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Russian Gas Price to Ukraine in 2007 Set at USD 130/tcm

Russian Gas Price to Ukraine in 2007 Set at USD 130/tcm

25 October 2008

According to an agreement signed yesterday in Moscow, in 2007 RosUkrEnergo will supply Ukrgas-Energo with 55 bcm of natural gas at a price of USD 130/tcm. A joint press release from the two companies said the agreement is an addendum to the agreement they signed for 2006-2010. Vladimir Nesterenko: The announced price meets our September forecast, representing the bottom level of the expected price range. Unfortunately, except for the price and supply volume, other details of the deal have not been made public. The positive news is that the price increase was not as large as it could be, it is fixed for 2007, and the volumes are predefined for 2007-2009. However, the Ukrainian party did not succeed in negotiating the gas price for a longer period, nor did it agree on a clear pricing mechanism. The news is by no means a surprise; the announced price has already been factored in market expectations.

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