Eastern Ukraine Tightens Gas Consumption Regime

KIEV, Ukraine -- The Dnepropretrovsk Region in eastern Ukraine has introduced a strict gas consumption regime for its enterprises, a Ukrainian television channel said Sunday with reference to the local administration.

The Ukrainian 5th TV channel said the local enterprises were urgently looking for alternative energy sources, mostly increasing coal and electricity consumption, after the authorities reduced gas consumption limits and gas prices started to rise steeply in the country.

The owners of Kryvorizhstal, Ukraine's metals giant, purchased last October by the world's biggest steel mill, Mittal Steel, in a bid of $4.79 billion, announced their plans to switch from gas to coke in steel production.

The Ukrainian NTN television channel said the industry of Ukraine's eastern coal-rich Donbass region was also experiencing the shortage of gas.

Transition from gas to other types of fuel will increase the prime cost of metal products and make Ukrainian enterprises less competitive, NTN said.

The critical situation with gas in the country arose a week after Russia started charging the country market prices for its natural gas, switching from the previous $50-60 per 1,000 cubic meters to $230.

Ukrainian Prime Minister Yuriy Yekhanurov said shortly after the new gas agreement was signed January 4 that Ukraine would reduce gas consumption from 76.5 billion cu m to 47 billion cu m annually in the next few years.

Source: RIA Novosti