Ukraine in talks on higher gas transit price for Russia in 2009

14:31, 27 November 2008
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If the price of natural gas climbs to $400 per 1,000 cu m

Ukraine`s national oil and gas company Naftogaz is holding negotiations with Gazprom on higher natural gas transit rates for the Russian energy giant in 2009, the Kommersant-Ukraine paper said on Thursday, according to RIA Novosti.

"If the price of natural gas climbs to $400 per 1,000 cu m, we can bring up the issue of increasing the cost of transit to $3.98 per 1,000 cu m per 100 km, as in Slovakia or to $4 as in the Czech Republic," the paper quoted Naftogaz head Oleh Dubina as saying.

Since 2008, Ukraine has raised natural gas transit prices for Gazprom to $1.7 per 1,000 cu m per 100 km from the previous $1.6.

Ukraine and Russia have failed so far to agree on a price for natural gas supplies in 2009. Ukraine currently pays $179.5 per 1,000 cubic meters and hopes the price will not rise above $250 per 1,000 cu m next year.

Meanwhile, Gazprom CEO Alexei Miller earlier said gas prices for Ukraine could reach $400 per 1,000 cu m in 2009.

Dubina declined to answer the paper`s question on whether the price of $230 per 1,000 cu m for 2009 would suit Ukraine.

Ukraine proposed on Tuesday setting a floating price for Russian gas deliveries to the country next year.

Oleksandr Shlapak, the first deputy head of the Ukrainian president`s secretariat, said the proposal was made in the light of the recent fall in oil prices on world markets, which have plunged from around $150 per barrel in the summer to the current level of just below $50.

The price of natural gas supplied by Russia`s energy giant Gazprom is based on the cost of crude oil and petroleum products.

"That is why we consider it necessary for a contract on natural gas supplies to contain an option to adjust natural gas prices throughout the year in line with global fluctuations," Shlapak said.

Gazprom earlier said it would not discuss natural gas prices for Ukraine until the ex-Soviet republic had paid off its outstanding $2.4 billion gas debt.

RIA Novosti

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