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Today's paper. Last Updated: 02/10/2012

Ukraine Imports 1/3 of Gas Agreed On

Reuters

Hungarian President Laszlo Solym, left, welcoming Ukrainian President Viktor Yushchenko to Budapest Tuesday. ��
Laszlo Balogh / Reuters

Hungarian President Laszlo Solym, left, welcoming Ukrainian President Viktor Yushchenko to Budapest Tuesday.

KIEV -- Ukraine imported just 1 billion cubic meters of Russian gas in April, one-third of the volumes that had been penciled in under a supply contract with Moscow, state energy firm Naftogaz Ukrainy said Tuesday.

The supply contract, signed after January's three-week standoff with Russia that led to supply cuts to Europe, provided for Ukrainian purchases of 40 bcm in 2009, including 10 bcm in April to June.

But energy consumption has fallen sharply as industries slash production and Ukraine plunges into a deep recession.

Ukrainian Prime Minister Yulia Tymoshenko, who brokered the supply deal, says she will discuss how volumes in the contract can be lowered when she meets Prime Minister Vladimir Putin in Moscow on Wednesday.

Ukraine expects to import 33 bcm this year, compared with about 55 bcm last year. In the first quarter, it imported 2.5 bcm, half of the contracted volumes, a fact that may yet spark another dispute between Kiev and Moscow.

Russia's position on the lower volumes is so far unclear. Gazprom chief executive Alexei Miller suggested that the company could fine Ukraine for underbuying, while other officials have said no sanctions are planned.

Naftogaz also said the price for gas in the second quarter would be $270.95 per 1,000 cubic meters, a dollar higher than its initial estimates and much lower than the $360 it paid in the first three months of 2009.

Last year, Ukraine paid $179.50 per thousand cubic meters throughout the year. This year, the price is a 20 percent discount on European prices and has to be calculated quarterly.

Sharp gas-price hikes since 2005 have pushed Ukraine's trade and current accounts into deficit, which in turn has weighed on the hryvna's exchange rate.

The hryvna has lost almost 60 percent of its value against the dollar since September.

Tymoshenko has said the average price that Ukraine will pay for gas in 2009 will be $228 per thousand cubic meters as prices for gas fall throughout the year. Analysts have said the current account could become balanced this year as imports drop off.

nHungarian gas wholesaler Emfesz said its supplier, RosUkrEnergo, had difficulties in getting gas out of storage in Ukraine and that in the future it would buy from RosGas.

Swiss-based trader RosUkrEnergo is half-owned by Gazprom, while Ukrainian businessman Dmitry Firtash owns another 45 percent stake. Firtash is also the owner of Emfesz.

RosUkrEnergo lost its role as a supply intermediary between Russia and Ukraine in January, and Ukrainian authorities took over 11 bcm of stored gas, which RosUkrEnergo says still belongs to it.

Istvan Goczi, managing director of Emfesz, said the firm expected to switch to the new supplier within a couple of days. Goczi said RosGas was controlled by Gazprom.


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