Gazprom: Ukraine To Pay Nearly US$180 Per Thousand Cubic Meters For Russian Gas

MOSCOW, Russia -- Ukraine will pay nearly US$180 (€122) per thousand cubic meters of Russian natural gas beginning next year, Russia's state-run gas monopoly said Tuesday — a 40 percent increase over current prices.

Gazprom chief executive Alexei Miller.

The deal comes after months of negotiations between Moscow and Kiev and is part of what Russia describes as an effort to end its practice of providing energy supplies to former Soviet republics at cut-rate prices.

That effort escalated into a full-blown dispute two years ago, during which Russia cut supplies to Ukraine. The dispute affected some European countries farther along the export pipeline and raising worries about Russia's reliability as Europe's main energy supplier.

OAO Gazprom said in a statement that, under the deal signed by Gazprom CEO Alexei Miller and Ukrainian Energy Minister Yury Boiko, Ukraine had agreed to pay US$179.50 (€121.70) per thousand cubic meters beginning in 2008. It also said transit prices would be set at US$1.70 (€1.15), the same transit price for gas shipping across Russian territory.

Ukraine currently pays US$130 (€88.19) per thousand cubic meters of gas imported from Russia.

Andrei Knutov, a spokesman for the joint gas concern RosUkrEnergo, said no official documents had been signed yet, though that was expected in the coming days.

Since the January 2006 supply disruption and a similar incident involving oil shipped across Belarus, Russia has sought to assure the European Union that export supplies would not be affected.

In October, Russia urged Ukraine to make good on what it said was a US$1.3 billion (€890 million) debt for gas shipments, a demand some Ukrainian officials described as an attempt to exert influence on Ukrainian politics after September's parliamentary elections.

The deal comes one week after Gazprom announced it would pay up to 50 percent more beginning next year for natural gas from Turkmenistan. Russia controls nearly all gas exports from the Central Asian nation and nearly all of it is destined for Ukraine.

The increased price that Russia will pay for Turkmen gas was seen as a concession by Moscow in an effort to spur Turkmenistan to speed up construction of a Caspian shoreline pipeline. The new pipeline system could give Moscow yet more control over Turkmen gas exports.

Source: International Herald Tribune