An article in today's London 'Times' is one of only a few in western media sources that reveal how flawed the Gazprom-Naftogaz Ukrainy contract, agreed and signed on Jan 4th, may really be.
A facsimile copy of the original, produced by Yulia Tymoshenko at a press conference on Thursday, may be seen here together with the previous contract between Gazprom and Naftogaz Ukrainy, dated 9th August 2004, fixing the price of gas delivered to Ukraine at the [ridiculously low] rate of $50/thousand c.m., and a transit rate of $1.09 until 2009.
The following translations of the relevant passages need no further comment:
To ensure transit of natural gas which belongs to Gazprom (Gazeksport Ltd) and Rosukrenergo through Ukraine and the Russian Federation, the Sides have agreed on the rate of payment for transit to the amount of 1.60 US dollars per 1,000 cu.m. per 100 km until 01.01.2011.
The Sides shall sign appropriate agreements and contracts...To sell: - in 2006 - 34bn cu.m. of gas to be sold at the price of 95 US dollars per 1,000 cu.m. of gas which is in force in the first six months of 2006, to the joint venture created according to Paragraph 3 of this agreement (to be sold to Naftohaz Ukrayiny until 1 February 2006 until the creation of the joint venture) for subsequent sale on the Ukrainian domestic market without the right to re-export;
The $95 rate is for six months only, not five years as trumpeted in the media.
Conspicuously, the newly-signed contract does not include paragraphs revoking the previous gas supply contract, which fixed the $50 thousand price, and was to run until 2009. I assume, therefore, that the Ukrainian side could always claim at some time in the future that the old contract is still valid.
The new contract may be considered as a statement of intent only - arrogant 'ochkovtiratelstvo,' [deception] presented to take the heat out of the rapidly developing crisis.
'Der Spiegel' today reports that former Chancellor Schroeder telephoned Putin and Gazprom chief Alexei Miller at its peak, when gas deliveries were dropping precipitously, and persuaded them to turn the gas on again and to sort out the disagreement with Ukraine as quickly as possible.
This gas business is going to rumble on, for sure. The above-mentioned 'Times' article gives details of problems in Turkey, Moldova, and Bulgaria. How long will it be before the Turkmens demand a fairer price for their gas? And Putin will be desparately trying to get Ukraine's gas transit system, its ace card, into his clutches, especially after the 'kicking' he's had. Tymoshenko will not let the matter rest either - this is her chance to get even for being sacked by Yushchenko - she knows all the intermediary 'operators' dirty secrets. And everyone knows negative campaigning works best..