BY
Following President Putin’s very predictable monologue
at the Valdai gathering, that day he also made a statement regarding Russian
gas prices for Ukraine, should Ukraine decide to buy Russian gas once again.
“Nowadays, the
price of Ukraine won’t be higher than that for the neighboring states, namely
for Poland. I’m not aware of actual prices, but at the moment of our
conversation with Ukrainian President Petro Poroshenko, Poland was buying gas
at $184-185 per 1,000 cubic meters on contractual terms. We could sell to
Ukraine at $180. I named the price – $180 per 1,000 cubic meters.
We have discussed the issue of gas shipments to
Ukraine with the president of Ukraine at his initiative. He asked whether
Russia could resume the shipments. Certainly, it could, at any second. Nothing
additional is needed – we’ve got a contract and an addenda to it. The only
thing required is prepayment.
As far as I know, the price of gas for the ultimate
industrial consumer in Ukraine already exceeds $300 per 1,000 cubic meters. We
offer a price of $180, but they don’t want to buy from us yet.
Let it be – let them work. The main thing is that they
could ensure transit supplies to European countries.”
(He also commented upon
the “illegalities” of Ukraine buying from western sources “which is a
violation of a contract between Gazprom and its western counteragents” and to which Russia “had turned a
blind eye.” and inferred to a
return of dubious “middle men” between Ukraine and western suppliers.)
At the same time, Prime Minister Groisman was in
France.
During this visit a deal
was signed with French energy company Engie regarding supply and the reservation of transport and
underground storage facilities operated by UkrTransGaz in Ukraine – the deal
commencing this winter.
Since mid-2015 Engie has
become a major supplier of gas to Ukraine, predominantly via Naftogaz,
delivering approximately 3.5 billion cubic meters of gas. Indeed
Engie intends to open a subsidiary in Ukraine.
Thus far, despite quite
significant legislative changes in the Ukrainian energy sector to bring it
toward EU Third Energy Package compliance and Association Agreement
obligations, the Ukrainian energy market has remained impenetrable to external
market players.
The proposed
privatisation of Centroenergo in 2017, whilst certainly of interest to dubious
Ukrainians such as Igor Kononenko (who seems to be filling key positions within
the company with “his people”), presents the best and swiftest opportunity for
the energy market to receive a competent foreign entrant assuming control and
ownership of assets and production in Ukraine – which will cause waves in the
corrupt and opaque trough of Ukrainian energy from which no self-respecting
oligarch fails to drink one way or another.
Clearly the Engie
subsidiary, unless it becomes more than an “on-site” import management entity
requires little investment and negligible risk – unlike the purchase of
Centroenergo.
Nevertheless, there is a
certain degree of symbolism to the French Engie opening a subsidiary in Ukraine
which a reader can expect will be embellished for the purposes of political
expediency. Much more to the point however, is a clear move in the
direction of a consolidated and irreversible diversification of energy supply
for Ukraine.
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