Saturday, May 06, 2006

Alternative suppliers of gas?

National Security & Defense Coucil Secretary Anatoliy Kinakh, in an interview in today's 'Ekonomicheskie Ivestiya', says Ukraine intends to start discussions on the supply of gas from Russia with alternative companies other than gas behemoth Gazprom.

"We're talking of a more liberal gas market. In particular, one of our discussion strategies is obtaining access to independent suppliers to the gas transport system, formation of a natural gas market, and creation of a gas exchange," he said.

"There's a lot of companies that wish to supply us with gas at quite attractive prices. Lukoil, TNK, and string of other structures. We're talking of tens of billions of cubic metres," he added.

Kinakh explained that according to Russian law, the many regions in which gas is extracted are also owners of a portion of this gas, and stated, "When we contact the authorities in these regions directly, we become convinced of their readiness to supply gas. The problem, which should be decided at governmental level, is their access to the Russian gas transport system, in particular the ratification by Russia of the European Energy Charter."

Gazprom deputy chief executive Alexandr Medvedev stated recently that Russia is not interested in ratifying the EU Energy charter which would allow third-party access to the Gazprom's pipeline network.

Kinakh also mentioned the need to solve problems of limited throughput capability of the 'Central Asia - Center' pipeline, which is vital for supplying Ukraine with Turkmen gas, and about which I have blogged previously.

President Niyazov of Turkmenistan is to visit Ukraine in the near future when"not only gas relations for the next half-year are to be determined, but also long-term agreements with Turkmenistan are to be signed.

Are Kinakh's remarks just a small part of a co-ordinated effort to break Gazprom's monopolistic grip of Russia's gas transportation system? It's going to be a big struggle..

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