Monday, January 21, 2008

Tymoshenko running on gas

Two stories, both on the Ukrainian gas business, caught my eye today.
'Gazeta po Kiyevski' carries a story entitled "Kremlin's hand pulled away from our gas reserves":"UkrGazEnergo" forbidden from developing the largest Odessa and Bezymyannoye [gas] fields.

Premier Yulia Tymoshenko continues to deliver her pre-election promise to exclude all gas intermediaries connected with Moscow from the gas market in Ukraine. Today the press-secretary of "ChornomorNaftogaz", Yuriy Avdeyev, reported that the company has torn up the agreement with "UkrGazEnergo" that provided them access to develop these two gas fields. Now the extraction of the strategic fuel will be undertaken by the state company "Ukrgazdobycha", a subsidiary of National Stock Company "Naftogaz".

This is the third blow delivered by Tymoshenko to "UkrGazEnergo", which is half-owned by "RosUkrEnergo"

On 8th January, the national commission for the regulation of electric power (NKRE) drastically chopped gas monopolist UkrGazEnergo's gas quota for the sale of gas in 2008 to 5 bcm per year. Now "UkrGazEnergo" has tens of billions of cubic metres of gas in underground depositories which it cannot sell.

And last week the KabMin delivered a second blow by sacking sack the deputy-head of "Naftogaz", Igor Voronin. He was simultaneously "UkrGazEnergo's" boss.
The estimated reserves of the above-mentioned gas fields are estimated to be 30 bcm of gas.

The second article, entitled: 'Gazprom gets a signal from Prodan', appeared in "Ekonomicheskiye Izestiya",

The minister of fuel and power Yuriy Prodan, during his meeting with the European Commission energy advisor Faouzi Bensarsa. found mutual understanding with Brussels on the question of modernization of the Ukrainian gas transport system [GTS]. He confirmed their readiness to put 2,5 billion Euro into its reconstruction, by 2013. [The (rather different) Brussels interpretation of this encounter can be read in English here ]

The Ukrainian GTS belongs to the state and is run by "UkrTransHaz" — a subsidiary company of "NaftoHaz". In terms of its capacity, extent and complexity it is the second largest in the world (second only to the Russian GTS). The enormous underground gas storage facilities, which make it possible to solve problems associated with seasonal consumption, make it unique. The Ukrainian GTS comprises 37,5 thousand km. of gas pipes, 71 compressor stations, and 13 underground storage facilities having a volume 32 bcm of gas. The maximum capacity of the system at entry is 288 bcm of gas per year, and at exit, 175 bcm, including 141 bcm to EU countries.

LEvko considers Tymoshenko's forthright stance does no harm to her political career. Yushchenko and Tymoshenko fell out 'big time' over gas in September 2005. Will history repeat itself?

Incidentally, the "New Europe" 'Energy Insider' column in an article entitled: "Tymoshenko gets rid of the energy middleman", considers:

"Moscow is unlikely to be opposed to the removal of RosUkrEnergo, an intermediary half-owned by Gazprom that sells Russian natural gas to Ukraine, because it will actually lead to greater transparency in Gazprom’s revenues in its dealings with Ukraine. The Russian gas monopoly has said that it is perfectly willing and capable of selling gas directly to Ukraine. "I don’t see the Russian side looking to defend this company because Gazprom wants to move towards greater transparency and to remove these question marks as it tries to push its way downstream into the European Union," Chris Weafer, chief strategist at Moscow-based UralSib Bank, told New Europe."

Update: From UNIAN

Tymoshenko to pay visit to Russia late in February

Prime Minister of Ukraine Yulia Tymoshenko will pay a visit to the Russian Federation late in February.
According to the President`s press-office, this was agreed at the today’s weekly meeting of the President with the Prime Minister of Ukraine.
Besides, Security Chief of Ukraine Raisa Bohatyryova will visit Russia on January 28-30. She will be busy with preparing the visit of President of Ukraine Victor Yushchenko to Russia, scheduled for 12 February.
This was agreed during the today’s telephone conversation of Victor Yushchenko and RF President Vladimir Putin.

Some reports claim it was president Yushchenko that prevented Tymoshenko from making her own trip to Moscow, planned for 23rd January. During this visit she was was to meet her opposite number PM Viktor Zubkov, President Putin, and Dmitriy Medvedev.
LEvko thinks next time at the NSDC meeting it may be Yushchenko that gets kicked, "in places that men often take pride in", and not Kyiv Mayor Leonid Chernovetsky..


hans said...

Getting rid of Voronin is a good move. He was key in the creation of RUE, was sacked once from Naftogaz, but managed -- like Boyko -- to come back.

Anonymous said...

The new europe analysis seems a bit of sync with most other analyses who tend to claim that Gazprom ie the Kremlin want everything as murky as possible so funds can get siphoned off in quantity.

Also Ukraine seems in a really bad position if two authorities are fighting over who has the authority to conduct negotiations and both try to do it simulataneously.

Taras said...

Thanks for the plug! And, yes, the would-be offender's profile may very well include a braid:)

Anonymous said...
"Укргаз-Энерго" допускает попытку силового захвата предприятия

Anonymous said...

Honestly it would not make any sense for Yushchenko to prevent Tymoshenko from going to Moscow. In fact for him it would be in his best interest to drive her to the airport himself.

Let's face it photos at this time hob-nobbing with Putin, Zubkov and Medvedev would not win her any brownie points at home UNLESS she took a tough stance which would only cause a gas crisis esp. as they are in pre-election mode in Moscow as well as trigger-happy regarding the very idea of Ukraine entering into NATO.

And I find it odd that the Oboz report makes no mention of Tymoshenko's illness which prevented her from going to Georgia on Jan. 20.

So don't know if the Oboz report is true or not but Yushchenko's people should have advised him to green light Tymoshenko visiting Moscow and gotten out the express VIP transportation. Perhaps even a loan of the Presidential jet?

Anonymous said...

President Viktor Yuschenko is initiating creation of a working group under the National Security and Defense Council to analyze the financial state of the Naftohaz Ukrainy national joint-stock company.