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Ukraine: Gazprom not asking for assets
by Staff Writers
Kiev, Ukraine (UPI) Jan 23, 2012

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Ukraine says Russian gas utility Gazprom isn't asking it to barter away state assets as part of negotiations to reduce the price it pays for imports.

Ukrainian Energy Minister Yuriy Boiko said Saturday that Kiev isn't being asked to turn over state-owned manufacturing plants and other types of infrastructure to the Russian gas monopoly Gazprom in exchange for lower prices.

"We have never considered [the sale of] such factories or assets as compensation, as other countries or companies, which have integrated with Gazprom, have done," Boiko told Ukraine's Inter TV channel.

While Gazprom is demanding control of Ukraine's gas transport system as a condition of lowering the prices it charges the country for natural gas, it hasn't asked for controlling interests in major Ukrainian gas consumers, Boiko said.

His comments appeared to refute recent stories in Ukrainian media indicating Russia has demanded state assets, particularly the Ukrainian Railways company, in exchange for gas price discount, the Russian news agency RIA Novosti reported.

Ukraine President Viktor Yanukovych said in September turning over the Ukrainian gas utility Naftogaz to Gazprom is off the table. Kiev instead wants to establish a trilateral commission between itself, Russia and the European Union to buy and operate its strategic gas transportation system, which carries Russian gas to European customers.

Gazprom in November merged with the Belarusian gas utility Beltransgaz in a $2.5 billion deal. Part of the arrangement was a revised energy deal for Belarus. Under its terms, Belarus would be charged $164 per 1,000 cubic meters of natural gas starting this year.

Ukraine paid Gazprom $400 per 1,000 cubic meters in December.

The two sides wrapped up another negotiating session Friday in a bid to set a lower gas price. Gazprom Chairman Alexei Miller said the meeting was "constructive" but offered no details.

Boiko told Inter afterward that Ukraine is intent on reducing the amount of gas it accepts from Russia if it can't hammer out a price closer to $250 per 1,000 cubic meters, despite protestations from Gazprom it is contractually committed to buying the full amount.

Ukraine has announced it will unilaterally cut Russian gas imports from the agreed 52 billion cubic meters to 27 billion cubic meters for 2012.

"If gas becomes cheaper, we will buy more, if no -- we will cut consumption each year," he said, adding, "We have levers allowing us to avoid sanctions" for failing to purchase the volume of gas stipulated in a 2009 agreement with Russia.

The only solution to the stalled negotiations is an agreement to allow the EU to be part of a three-party commission for to own and control Ukraine's vital gas transport system, Ukrainian Prime Minister Mykola Azarov said Friday.

The prime minister stated such a deal is "the only possible option" to settle the gas price dispute with Russia, Interfax reported.

"Without Russia, the owner of the gas, and its consumer [the European Union], we will never reach an agreement and receive long-term guarantees for our [gas transport system]," Azarov said.

"These are huge expenses for us -- the system maintenance, this large system, which was constructed in its time for the transportation of 150 billion cubic meters of gas. And if it works at a lower capacity, this will bring losses to the country," he added.

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