Kiev in talks with Europe on new Ukrainian gas consortium

Ukraine has forwarded proposals to European gas companies to set up a natural gas transportation consortium to help modernize and maintain the Ukrainian gas system, Yuriy Prodan, the parliament-appointed Minister of Energy and Coal Industry, said on Wednesday.

“Ukraine is already in talks concerning the mooted consortium. We forwarded relevant proposals to European gas companies,” Prodan told journalists. Moscow was ruled out of the talks since Russia had never sent proposals concerning the network's future development, he said.

Parliament-appointed Prime Minister of Ukraine Arseniy Yatsenyuk told a news conference on Tuesday that Kiev was set “to discuss joint maintenance and modernization of Ukraine’s gas transportation system” with American and European investors.

Ukraine has been accustomed to heavy reliance on Russian supply. Earlier this month, Moscow announced that the price for its neighbor would rise to $485 for 1,000 cubic metres.

Russian supplier Gazprom's chief executive Alexei Miller told Prime Minister Dmitry Medvedev in early April that account taken for March delivery,Ukraine’s debt to Russia exceeded $2.2 billion. Gazprom was specifying a supply price returning to earlier contract agreements since Ukraine had failed to fulfil commitments under an agreement in December 2013. It obliged the country to pay on time for delivered volumes.

On April 2, President Vladimir Putin signed a law to renounce the Kharkiv Accords with Ukraine of 2010 that stipulated Russia’s lease of naval facilities in Crimea (then part of Ukraine) would be extended by 25 years beyond 2017, until 2042.

The deals envisioned a discount of $100 for 1,000 cubic metres of supply to Ukraine. Now they have been renounced over Crimea’s merger with the Russian Federation, the discount is no longer applied, raising the supply price to $485.

From the second quarter of this year, Gazprom pays 10% more for Russian gas transit to European consumers via Ukraine. Gazprom has pledged to fulfil its commitments.