The new government in Kyiv, formed after Viktor Yanukovych’s victory in the presidential elections, is close to finalizing a law that would allow Russian Gazprom and European buyers of Russian gas to partially manage the Ukrainian gas pipeline network, the government announced on Friday.
Thus, the idea of a consortium involving Naftogaz Ukraine, Gazprom, and European energy companies is back on the table. Such a solution would mean a turnaround in the gas arrangement between Kyiv and Moscow, which has so far burdened the relations between the two countries, and would also provide new prospects for European buyers of Russian gas, who have felt the complexity of Russian-Ukrainian relations firsthand. The solution implies granting partial control over the Ukrainian gas pipeline network, which has so far been one of Kyiv’s main assets in its position towards Moscow. However, Ukraine, faced with enormous economic problems and a budget deficit, now seeks cheaper gas to alleviate some of the pressures on its finances. Just in March, the national energy company Naftogaz Ukraine received a gas bill of $700 million, and the state budget cannot participate with more than 10 percent in covering it.
The Deputy Prime Minister stated that contacts with the Russian side are intense and that a change in gas trade conditions is likely. The swift passage of a new law, in less than a month since the new president took office, is a sign that Ukraine desperately needs an agreement, says the Russian newspaper Moscow Times. Another reason could be that the new president wants to get this done quickly and take advantage of the time when Tymoshenko’s opposition has not yet fully consolidated after the elections. The former prime minister vehemently opposed Ukraine ceding any rights to manage gas to foreign entities. Such a possibility was excluded under the previous law.
