Tuesday, August 29, 2006

oh really?

Aug. 23, 2006, 4:08AM
PM: Ukraine Vow Not to Siphon Off Gas

© 2006 The Associated Press

KIEV, Ukraine — Prime Minister Viktor Yanukovych has promised that Ukraine will not siphon gas this winter from pipelines that pass through its territory carrying supplies for Europe _ a pledge meant to reassure Western Europe that Ukraine is a reliable partner.

Many European countries, which receive much of their gas from Russia via Ukraine, suffered significant reductions last winter amid a bitter price dispute between Moscow and Kiev. Russia temporarily cut supplies to Ukraine and complained that Ukraine was siphoning off Europe-bound gas.

European customers initially put much of the blame on Russia for reducing the amount of gas going into the pipelines, but began complaining of Ukrainian siphoning later in January when a second shortage occurred amid a severe cold snap.

Yanukovych said Tuesday that Ukraine was preparing for winter, pumping in 130 million cubic meters of gas into storage tanks every 24 hours so it would have enough of its own reserves.

"I am saying this so Europe can hear and they can feel at ease," Yanukovych said. "We won't take European gas from the pipes this winter. That gas we are pumping into storage will be enough for us."

The deal that ended the price dispute resulted in a nearly twofold increase for Ukraine and involved an obscure intermediary company.

The participation of the intermediary, RosUkrEnergo, which mixes Russian gas with cheaper Turkmen supplies, triggered widespread criticism for its lack of transparency, but Yanukovych defended the move Tuesday. He said all negotiations over price and the volume of gas deliveries are going on directly between Ukraine and the Russian gas monopoly OAO Gazprom, insisting that Ukrainians don't care who will fulfill the deal.

Yanukovych said that he expects the gas price set at US$95 (euro75) per 1,000 cubic meters to remain unchanged through the end of the year. "Next year, there is a possibility of a small increase in the price on gas," Yanukovych said, corresponding to world market prices.


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