Wednesday, January 04, 2006

Murky Gas Deal - Murky Gas Company

So, they struck a deal... No more barter, that is cash is paid, both for gas and for transit. The previous deal was gas for transit. RosUkrEnergo is not only the middleman but the exclusive supplier of gas to Ukraine.

Ivchenko via :
we shall be buying gas of different origins, both russian and central asian, from the rosukrenergo company. the price of gas will be 95 us dollars per 1,000 cu.m. at the russian-ukrainian border. i want to add that the price of gas and
the transit rate are not linked because we shall be paying money for gas and gazprom will be paying us money for the transit of russian gas to europe. the transit rate has been raised from 1.09 to 1.6 dollars per 1,000 cu.m. of gas per 100 km.

About former SBU head Turchynov beginning an investigation of RosUkrEnergo from a Kyiv Post article reprinted on Kiev Ukraine News Blog via Neeka's Backlog:

The State Security Service (SBU) has launched probes into alleged violations by gas trading firms that allegedly siphoned more than a billion dollars from state coffers when they worked as intermediaries handling Turkmen gas supplies to Ukraine.

SBU chief Oleksandr Turchinov told the Post on June 17 that an investigation has been launched into the activities of Swiss-registered RosUkrenergo and intermediaries that handled Turkmen gas supplies to Ukraine in previous years.

Like its predecessors, RosUkrEnergo acts as an intermediary in transiting gas from Turkmenistan across Russia and other former Soviet states to the Ukrainian border. Its shareholder structure remains a bit cloudy.Company officials have said that affiliates of Russian gas giant Gazprom and Austria’s Raiffeisen Investment AG own parity 50/50 stakes in the venture.Turchinov told the Post that Raiffeisen Investment AG, according to his information, acts as a nominal shareholder representing private interests of individuals whom he declined to name for fear of revealing inner workings of the investigation.

Turchinov said RosUkrEnergo, a company which has an annual turnover of more than a billion dollars, could not have been created without the approval of the most influential people in Russia and Ukraine. Severe infringements were discovered in the company’s dealings, he said, adding that such schemes involve siphoning of funds which should have flowed into the state budget, rather than having been diverted into private hands.

A RosUkrEnergo top manager revealed to the Post in an interview last week that Raiffeisen Investment’s role in RosUkrEnergo was bound to contractual arrangements with Ukrainian clients, which he could not identify...

To round it all out the deal story in a nutshell from Dow Jones:

Greg Walters,
Dow Jones Newswires
Moscow, Russia,
Wednesday, January 4, 2006

MOSCOW -- Russia and Ukraine Wednesday announced a 2006 gas deal aimed at breaking a stalemate that had choked off supplies to Ukraine and other European countries over the last several days.Under the agreement, state gas monopoly OAO Gazprom(GSPBEX.RS) will sell gas to its 50%-owned trading company RosUkrEnergo at $230 per 1,000 cubic meters. The trading company, which will also buy Central Asian gas at a much lower price, will then sell gas to Ukraine at $95 per 1,000 cubic meters, less than half the price Russia has recently demanded.The parties also agreed that Russia will now pay cash for the transit of gas across Ukraine. Previously, Russia paid in gas.

The price for transporting gas through Ukraine to Europe rose under the deal to $1.60 for 1,000 cubic meters traveling through 100 kilometers of pipeline, from $1.09.Under the deal, reached at 2:30 a.m. Wednesday morning between the heads of Gazprom and Ukrainian gas distributor Naftogaz, gas exports from Turkmenistan will be purchased by RosUkrEnergo and re-sold to Ukraine, a person familiar with the situation told Dow Jones Newswires. The person didn't say how much Turkmenistan gas will be sold to RosUkrEnergo or at what price.Gazprom had previously contracted 30 billion cubic meters of gas from Turkmenistan at a price of $65 per 1,000 cubic meters.

Ukraine also agreed to pay cash for Russian gas in the future. Previously it took gas in trade for transport. A Gazprom spokesman said the five-year contract foresees prices fluctuating according to world prices. Under the deal, "RosUkrEnergo, is the exclusive gas exporter to Ukraine" said, Gazprom spokesmen Sergei Kupriyanov.Russia Sunday triggered a gas supply crisis in Europe when it cut off exports to Ukraine after its neighbor rejected a price hike to $230 per 1,000 cubic meters, more than four times what it had been paying.

More than 80% of Russia's gas supply to Europe travels across Ukraine. Shortly after Russia cut off Ukraine's supplies, France, Italy and a number of other European countries reported a sharp fall off in gas deliveries from Russia. Russia Tuesday increased supplies to make up for the shortfall.The deal appears to be a complex face-saving agreement that still allows Gazprom to keep the $230 price it has insisted upon, while allowing Ukraine to pay less than half that amount.

Now it's time to figure out who's going be making the big bucks.


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Anonymous Max said...

I believe that gas problem will be resolved in few years and only if Ukraine will show loyalty to Russia and find stable alternative sources of gas somewhere in Asia. But don't forget that Russia has certain influence on that Asian countries too...

7:14 AM  

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