Azerbaijan signed protocol on gas supplies to Ukraine

09:39, 01 July 2008

Yushchenko stated that in course of negotiations...

President Viktor Yushchenko of Ukraine used his Baku visit, linked formally with the opening of the monument to the Ukrainian poet of XIX century Taras Shevchenko, for receipt of guarantees for gas supplies to his country according to Azerbaijan Business Center.

When visiting Baku Yushchenko stated that in the course of negotiations it was covered partnership in the area of gas transportation systems.

“Several days ago we signed a protocol of intentions on co-operation in the area with high-ranking representatives of Azerbaijan. In other words, positive dynamics is observed here,” Yushchenko said.

The protocol can relate only supplies of Azeri gas after 2012 or transit gas.

At the same time currently Azerbaijan has not gas volumes Ukraine needs. In particular since January 1, 2009 Ukraine in any case will have to pay for gas at the world price (expected to be $300-350 per 1 000 cu m) in connection with rise in prices for Caspian gas. Recently Prime Minister of Ukraine Yulia Tymoshenko claimed of her country’s readiness to transfer to these prices for the next three or four years, but now Ukraine has not such time as experiencing competition with European companies Russian monopoly Gazprom has already signed agreements on whole export of Central Asian gas at European prices. Gazprom has also made a similar proposal to Azerbaijan, but the final decision of the latter will depend on country’s main gas producer – Azerbaijan Operating International Company (AIOC) developing offshore gas condensate field Shah Deniz. The AIOC has already claimed that it is planning to launch production within Phase 2 of Shah Deniz Project in 2013 and sees South-European pipelines and Nabucco as the main export routes for this gas transportation. But this export route plans have place for neither Gazprom nor insolvent Ukraine.

Even if Azerbaijan had stated its gas supplies to Ukraine, as it occurs in case with Georgia, the gas price would hardly have been lower than fatal-for-Ukraine $200 per 1 000 cu m.

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