Ukraine Turns to Germany for Gas

                       Ukraine Turns to Germany for Gas

  PR Newswire

  KYIV, Ukraine, November 2, 2012

KYIV, Ukraine, November 2, 2012 /PRNewswire/ --

Ukrainian state-owned gas-managing company Naftogaz signed a contract with
German RWE regarding the supply of one million cubic meters of natural gas per
day in November - December of 2012. The gas will go through the pipeline
system  Drozdovychi   that connects the two countries via Polish territory.

The terms of the short-term contract stipulate a somewhat lower price for gas
than that provisioned by the current contract with Russia, stated Naftogaz
official Pavlo Afanasiev. After the two-month contract expires, the sides plan
to discuss long-term commitments regarding the supply of gas in the reverse
direction, i.e. from Europe to Ukraine.

Notably, in October - December 2012, Ukraine will have to pay USD 432
(including USD 100 discount) per thousand cubic meters of Russian gas. In
April 2012, the Prime Minister of Ukraine Mykola Azarov informed that Poland
paid USD 310.

In May 2012, Naftogaz signed a framework agreement with RWE Supply & Trading
GmbH that provides legal grounds for future natural gas supplies from Germany
to Ukraine. Naftogaz planned to cooperate with RWE regarding the supply of
spot gas through Slovakian pipelines, but the company official stated that
Russian Gazprom made an attempt at hindering such arrangement, while
additional technical shortcomings prevented the project from being put to
life, informed .

The amount of gas Ukraine buys from RWE may reach 12 million cubic meters per
day, said Afanasiev. The annual import may amount to approximately 5 billion
cubic meters of natural gas. Current capacity of the pipeline through Poland,
which is planned to be used for the transport of gas, is 4.38 billion cubic
meters of gas per year. Additional gas may be supplied through an alternative
route via Hungary.

Ukraine has been seeking partners to buy gas from both in Europe and Asia in
order to decrease energy dependence on the supplies of natural gas from

To diversify gas supply, Ukraine plans to facilitate liquefied gas import from
remote suppliers. The country is currently building a liquefied natural gas
terminal. Its technical development will be finalized by December 2012,
according to . By 2015 the terminal will allow processing of
5 billion cubic meters of gas per year.

Contact: For more information, please contact Maria Ivanova, +380443324784,, Project Manager at Worldwide News Ukraine
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