Ukraine Seeks To Cut Russian Gas Imports By A Quarter

KIEV, Ukraine -- Ukraine is planning to cut its imports of Russian gas next year by more than a quarter of the present level in a bid to reduce its fuel bill from its giant neighbour, a high-ranking official of Naftogaz oil and gas firm said on Friday.

The former Soviet republic, whose government is trying to re-negotiate a 2009 gas deal with Moscow which it says sets too high a price for supplies, is seeking alternative energy sources to reduce its reliance on Russia.

It has signed a contract with Germany's RWE for alternative gas shipments, which might provide about 5 bcm of gas in 2013.

Kiev says it plans also to draw on its own limited domestic gas sources and make more use of abundant coal reserves to power industry and heat homes.

Vadim Chuprun, a deputy head of Naftogaz, said Ukraine planned to reduce Russian gas imports to 18-20 billion cubic metres (bcm) next year from this year's 27.5 bcm. 

But he expected opposition to the idea from Russia.

"Our opinion is that in 2013 we could import about 20 bcm of gas from Russia, or even 18 bcm," Chuprun told reporters.

"We know that (Russian gas giant) Gazprom will oppose, but we do not need such a large volume of Russian gas at such high prices," he said.

The government had earlier put a higher figure on Russian gas import requirements of 24.5 bcm for next year.

Moscow says it will cut prices only if its gas export monopoly Gazprom is allowed to buy into the pipelines that carry Russian gas across Ukraine to markets further west in Europe.

Kiev has so far refused to agree.

Kiev is due to pay $430 per 1,000 cubic metres in the fourth quarter of this year and the price could rise further to about $432 per tcm in the first quarter in 2013, according to analysts' calculations.

Naftogaz paid $400 in the fourth quarter of last year.

Naftogaz is also planning to explore oil and gas deposits on the Ukrainian Black Sea shelf and said on Friday it had chosen Singapore's Keppel FELS as a supplier of two new offshore platforms.

The company will pay $1.226 billion for the two rigs, which are due to be delivered to Ukraine in 2014.

Earlier this year Ukraine selected a consortium led by ExxonMobil and Royal Dutch Shell to explore the Skifska oil and gas field on the Black Sea shelf.

The Skifska field has a potential annual yield of 3-4 billion cubic metres of hydrocarbons.

Another Black Sea field, Foroska, could yield 2-3 billion cubic metres a year. 

Source: Yahoo News