Ukraine promises no "Christmas jokes" on gas deliveries

Sep 3, 2009, 12:08 GMT

Kiev - Ukrainian Prime Minister Yulia Tymoshenko on Thursday offered reassurances to Europe's natural gas consumers, saying a recent agreement with the Kremlin on fuel deliveries had eliminated chances of another Russian gas blockade.

'Ukraine and Russia are convinced, that this Christmas there will not be any of the traditional jokes, which have taken place in the gas sphere (in the past),' Tymoshenko said at a televised cabinet meeting.

Tymoshenko and Russian Prime Minister Vladimir Putin on Wednesday announced an agreement under which Ukraine would import gas on a pay-as-you-go basis and there would be a waiver of hundreds of millions of dollars of fines owed to Moscow by Kiev for non-usage of gas contracted for 2009.

'Everything will run quietly and smoothly on the basis of existing contracts,' she said.

At Thursday's cabinet meeting, Tymoshenko announced a planned 65- 70-per-cent increase in fees charged to Russia for gas shipped via Ukrainian pipelines to European consumers. This hike in the transit fee was not mentioned on Wednesday.

The deal reached Wednesday after a single meeting in Poland between the two prime ministers came in sharp contrast to a long-running price dispute over gas import and transit shipment. In January, that dispute led to three-week Russian blockade of all natural gas exports to Ukraine.

A new willingness by both Ukraine and Russia to renegotiate gas delivery terms made possible downward changes to overall gas volumes contracted by Ukraine from Russia for 2009 and 2010, Tymoshenko said Thursday.

'Because of the (financial) crisis, we are going to consume less gas ... and our Russian partners have agreed to this,' she said.

She praised the Putin administration's 'understanding' on the planned increase to gas transit fees charged Russia by Ukraine, saying 'this is the first meaningful hike (to transit fees) in 18 years.'

Tymoshenko indirectly confirmed that she was in agreement on natural gas planning with her political rival, Ukrainian President Viktor Yushchenko, announcing her government had revised upwards its estimates of probable Ukrainian gas consumption through 2010 to match Yushchenko's predictions.

A senior Yushchenko adviser on Wednesday said the president generally supported the terms of Tymoshenko's agreement with Putin but criticised Tymosheko for underestimating probable Ukrainian gas consumption.

Tymoshenko's Thursday estimate, updated to 27-33 billion cubic metres to be imported from Russia in 2010, matched Yushchenko administration estimates exactly.