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Ukraine satisfied with gas talks, but needs no ’excess gas’

26 March 2010 18:15 (UTC +04:00)

Baku â€“ APA. Ukrainian Prime Minister Mykola Azarov said on Friday that he was mostly satisfied with his visit to Russia and that Ukraine will only buy as much Russian gas as it needs, APA reports quoting RIA Novosti.
Azarov met with Russian Prime Minister Vladimir Putin at a government residence near Moscow on Thursday amid pledges to "reset" Russia-Ukraine ties, badly damaged by the policies of West-leaning former president Viktor Yushchenko.
While Putin decried labeling Russia-Ukraine gas contracts as "unfair" or "unbeneficial," he said that he had "found a compromise" with Azarov in "switching over to market price formation - both in gas and transit prices."
Earlier on Thursday, Azarov met with Gazprom CEO Alexei Miller, who said that gas prices would depend on the volume of purchases.
"An important result of the meeting is that Russia has agreed to start talks on this subject," Azarov said during a news briefing on Friday. "It would be very naive to think that one meeting has resolved a whole host of issues after five years of such an absurd policy towards Russia."
"We are in favor of revising the contract [on gas sales], and the contract must meet market conditions," Azarov said. "We will buy as much gas as we need for winter storage... we do not need excess gas."
He added that Ukraine "should take into account the interests of the Russian side."
The new Ukrainian government is unhappy about the gas legacy left behind by former premier Yulia Tymoshenko, who signed a long-term gas deal with Putin in early 2009.
Earlier this year, Russia introduced a market gas price for Ukraine, which Kiev says is "unreasonably high." The price is set at $305 per 1,000 cu m of Russian gas in the first quarter and $320 in the second.
The Ukrainian government has complained that Belarus, Russia’s other main western neighbor only pays $168. Putin says that the reason for this difference in price is that Belarus is part of a Customs Union with Russia and Kazakhstan while Ukraine is not.
In return for cheaper gas, Ukraine has offered Russia a stake in its state gas transportation system, involving the EU and Ukrainian companies. The system currently accounts for about 80% of Russian natural gas exports to Europe.
However, Putin’s remarks that there was no immediate link between Russia joining the consortium and cheaper gas prices have led many experts to believe that the offer is overdue. Finland and the Baltic states have already lifted environmental concerns over the construction of the Kremlin-backed Nord Stream gas pipeline, which will bypass Ukraine in supplying Russian gas to the EU.