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No results achieved at Gazprom-Neftegaz negotiations

Business Materials 29 February 2008 23:42

( Itar -Tass) - No results achieved at Gazprom-Neftegaz negotiations. Gazprom will cut gaz supplies to Ukraine by a fourth on March 3 - Kuprianov.

But Gazprom is ready to continue negotiations with Ukrainian partners this weekend, company spokesman Sergei Kupriyanov told Itar-Tass. "We are ready to do that," he said but could not answer the question whether the Ukrainian side was equally ready.

He said they had not fully repaid the debt for November-December supplies and continued to take gas this year without appropriate contracts.

" Ukraine has received about 1.9 billion cubic meters of Russian gas worth of about $600 million. They have not signed agreements on further deliveries," he said.

Ukraine does not want to officially confirm the February 12 agreement, Kupriyanov said. "It is not only the question of joint ventures. They are evading almost every other agreement, as well," he said.

Back on February 12 Russia and Ukraine agreed that Ukraine would pay for the delivered gas and develop a new formula of gas imports. That formula implied the formation of a new company to sell imported gas on parity terms (50% for Gazprom and 50% for Neftegaz Ukrainy). Neftegaz said it would settle the gas problem during February.

"We agreed that Ukraine would start paying the debt for last November-December on Thursday (February 14). That debt formed because the appropriate entities had not signed the gas delivery contract and the reconciliation statement," Yushchenko said on that day. "We will pay for gas delivered last year in 2007 prices. The payments will start on Thursday and will be completed soon."

He also said that Ukraine would retain the Russian gas price of $179 per 1,000 cubic meters this year.

Putin confirmed that Gazprom had accepted proposals of the Ukrainian partners. "We hope that the agreements will be honored," he said.

"We have discussed the problem very closely. We have spoken not only of the current situation but also of our future cooperation. We regret that problems of the kind keep popping up. The current problem is related, among other things, to the severe winter in Central Asia," Putin said.

Gazprom warned on February 26 that it would have to cut gas supplies by a fourth starting from March 3 if Neftegaz does not make full settlements and does not sign related contracts.

Gazprom's subsidiaries, Gazprom Transgaz St. Petersburg, Gazprom Transgaz Moscow and Gazprom PHG, have received relevant instructions. The European Commission and European partners have been notified about the situation.

Early this week Neftegaz announced the full payment for last year's supplies to UkrGazEnergo (a joint venture of RosUkrEnergo and Neftegaz). Neftegaz said they had transferred 3.87 billion hryvni (about $774 million). Kupriyanov said that their announcement was "somewhat premature."

This year RosUkrEnergo (owned at 50% by Gazprom and 50% by two individuals) is supplying Ukraine not only with Central Asian gas but also with Russian gas. The consumption of Russian gas has not been confirmed with contracts.

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