New arguments in Russia-Ukraine gas dispute

2011/09/08

Centre for Eastern Studies:

Ukraine’s energy minister Yuri Boyko said on 7 September that since Gazprom is forcing Kiev to purchase more gas than the Ukrainian economy requires, as of next year Ukraine will begin to export all of its domestically produced gas. (Kiev has placed an order for 27 billion cubic metres of gas for 2012; under the ‘take or pay’ clause however Gazprom has demanded that Ukraine purchase at least 33 billion cubic metres). According to Boyko, the Russian gas will be used to meet the country’s domestic energy demand (since the contract with Gazprom prohibits Kiev from re-exporting Russian gas), while locally produced gas will be sold on the spot market. The minister stressed that such transactions would be possible under the recently amended law regulating the Ukrainian gas market. Boyko also proposed that Ukraine could purchase all Russian gas at the border and then execute Gazprom’s contracts with Europe itself.
In response to the statement, representative of the Russian embassy in Kiev Alexei Urin warned that if such changes were implemented, Russia could cancel the agreement signed on 21 April 2010 which grants Ukraine a $100 discount for every 1000 cubic metres of gas purchased from Russia.

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