With the kind permission of Radio Free Europe/Radio Liberty, InfoUkes Inc. has been given rights to electronically re-print these articles on our web site. Visit the RFE/RL Ukrainian Service page for more information. Also visit the RFE/RL home page for news stories on other Eastern European and FSU countries.
Return to Main RFE News Page
InfoUkes Home Page
END NOTE: UKRAINIAN PRESIDENT IN TURKMENISTAN FOR GAS TALKS xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
UKRAINIAN PRESIDENT IN TURKMENISTAN. Ukrainian President Viktor Yushchenko arrived in Ashgabat on 22 March for two days of talks with Turkmen President Sapurmurat Niazov, Interfax reported. The main topic of discussion will be continued Turkmen supplies of natural gas to Ukraine. Ukraine is heavily dependent on Turkmen gas and imports 36 billion cubic meters annually. In January, Turkmenistan raised the price of gas by 32 percent and now charges $58 per thousand cubic meters. The current purchasing contract with Turkmenneftegaz ends in December 2006. As of January 2007 Ukraine will need to buy Turkmen gas from Gazeksport, a subsidiary of Russia's Gazprom, which signed a 25-year contract to purchase most of Turkmenistan's gas production. Yushchenko is also scheduled to discuss arms sales to Turkmenistan and will attend Norouz celebrations. RK
UKRAINIAN OBLAST WRAPS UP VOTE FRAUD PROBE. Prosecutors in Zhytomyr Oblast have ended their investigation into election rigging during the presidential election in 2004 and indicted eight individuals, whose trials are either over or still in progress, UNIAN reported on 22 March. One man was convicted of voting 11 times for Viktor Yanukovych using absentee ballots and fined 1,000 hryvnia ($189). In another instance, the court tried the head of a regional election commission who allegedly falsified the vote count and declared that Yanukovych had won in the district, when in fact the winner was Viktor Yushchenko. The defendant was found guilty and sentenced to five years in prison, which was later commuted to one year of probation. RK
...AS OFFICIALS EXCHANGE BARBS ON EVE OF TALKS. Moldovan and Transdniestrian officials exchanged harsh recriminations on the eve of a high-level meeting between the two sides, ITAR-TASS reported on 22 March. The Moldovan government accused Transdniestrian leaders of "preparing a large-scale armed destabilization" to counteract the "reinvigoration of Moldova's partnership with Ukraine, Romania, and the European Union in the Dniester peace process." Transdniestrian leader Igor Smirnov said that such a destabilization would benefit Chisinau, as it would discredit Russian peacekeepers in the region. Vasile Sova, Moldova's minister of country reintegration, and Valery Litskai, foreign minister of the self-proclaimed Dniester Republic, are scheduled to meet on 22 March at the Organization for Security and Cooperation in Europe's mission in Chisinau to discuss reducing tensions. BW
UKRAINIAN PRESIDENT IN TURKMENISTAN FOR GAS TALKS
Gas will be on Ukrainian President Viktor Yushchenko's mind on 22 March when he arrives in Ashgabad to meet with Turkmen President Saparmurat Niyazov. Steady supplies of Turkmen gas are critical for Ukraine as it seeks to reform its energy sector, while diversifying its energy supplies. Yushchenko is hoping to cut a deal that will insure that the pipelines remain full.
Ukraine's present contract with Turkmenistan for gas expires by the end of 2006. Beginning in January 2007, most Turkmen gas will go to Russia's Gazprom. The Russian energy company has signed a 25-year contract with Ashgabad that allows it to purchase the majority of Turkmenistan's gas production. Ukraine will then be forced to purchase from Gazprom the 36 billion cubic meters of Turkmen gas it needs annually.
In January, Ashgabad unexpectedly raised the price of gas by 32 percent to $58 per thousand cubic meters. Ukraine almost immediately agreed to pay. Gazprom, however, decided not to buy gas at the higher price and does not seem to be in a hurry to negotiate with Niyazov. This situation places Ukraine in a slightly favorable position in the coming negotiations with Turkmenneftegaz, the state oil and gas company.
The new Ukrainian gas strategy seems to be a multifaceted one. Oleksiy Ivchenko, the new head of Ukraine's oil and gas monopoly Naftohaz Ukrayiny, has put forth a proposal to create a Ukrainian-German-Polish group to sell non-Russian gas to the European Union. The group is exploring the possibility of purchasing Turkmen and Kazakh gas for resale to the EU and thus break Gazprom's monopoly on sales to Europe from the former Soviet Union. The major drawback of this plan is that presently all Central Asian gas is carried in the Central Asia Center trunk pipeline, which goes through Russia to Ukraine and then to the EU.
The German energy giant E.ON is said to be involved in discussions with this group, RIA Novosti reported on 11 March. During his visit to Germany in March, Yushchenko met with E.ON executives along with the head of Ruhrgas, Germany's largest gas company.
Soon after Yushchenko's visit, Deutsche Bank announced a 2 billion euro ($2.6 billion) credit line for Naftohaz, Interfax reported on 9 March. The credit line is to last for five years and the first tranche of $350 million is expected in April.
Another facet of Ukraine's strategy is to expand the number of participants in the consortium that manages the Ukrainian trunk pipeline. This pipeline delivers 80 percent of Russian gas to the EU. The consortium presently consists of Ukraine and Russia, which both hold 50 percent of the shares. The Ukrainian side has proposed to expand the consortium's membership and allow all EU members, as well as Turkmenistan and Kazakhstan, to join.
Ukraine is also exploring the possibility of buying Iranian gas. In an interview with the Ukrainian weekly "Zerkalo Tyzhnya" on 19-25 March, Ivchenko mentioned that there was room for Iran to join the pipeline consortium. Yushchenko has announced his intention of visiting Iran in the first half of the year. One possible topic of discussion in Tehran could be a feasibility study, prepared by the Kyiv-based VNIPI Transgaz Institute, for a 550-kilometer gas pipeline from Iran to Armenia to the Georgian port of Supsa then under the Black Sea to the Crimean town of Feodosia. The cost of the project has been estimated at $5 billion with the capacity to deliver 60 billion cubic meters of gas a year, of which 10 billion would remain in Ukraine.
Also up for discussion is the question of who will be the "operator" of Turkmen gas to Ukraine. Ivchenko told "Zerkalo Tyzhnya" that the present arrangement with the RosUkrEnergo company is not in Ukraine's interests. If Ukraine ends its contract with RosUkrEnergo, it will push Russia's Gazprom out of a very profitable venture. Gazprom is a major shareholder in RosUkrEnergo and, as such, stands to lose millions of dollars. RosUkrEnergo took over the "operator" contract from a Hungarian-registered company, Eural Trans Gas, in January.
The new Ukrainian government is also likely to investigate some of the murkier dealings from the era of former President Leonid Kuchma. On 3 March, Interfax reported that Ukrainian Prime Minister Yuliya Tymoshenko announced that the former senior management of Naftohaz will be investigated by the Ukrainian authorities for "gray schemes" in the transport of Turkmen gas to Ukraine.
END NOTE: UKRAINIAN PRESIDENT IN TURKMENISTAN FOR GAS TALKS xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
... AS EXPERT SAYS KYRGYZ EVENTS SPELL THE END OF THE CIS... National Strategy Institute Director Stanislav Belkovskii said on 21 March that the campaign of civil disobedience in Kyrgyzstan, in the wake of the popular revolutions in Georgia and Ukraine, means that Russia should immediately disband the CIS, TV-Tsentr reported on 21 March. Otherwise, Moscow risks losing its last bits of influence and allies in the region. "The CIS was created as funeral service for the Soviet Union and its functions have been completed," Belkovskii said. "Now it is dead itself." Belkovskii said that the CIS was always a Russia-centered alliance and that Moscow failed to propose to CIS members any "future project" or attractive development model. He noted that Georgia, Ukraine, Uzbekistan, Azerbaijan, and Moldova have already formed GUUAM and each are pursuing alternative paths. Belkovskii concluded that the only Moscow can do now is to propose a new alliance to Kazakhstan, Belarus, Armenia, Tajikistan, and Kyrgyzstan in order to keep these countries as "friends of Russia." VY
...AND ADVISES KREMLIN TO SIDE WITH KYRGYZ PRESIDENT. Belkovskii also said that "Kremlin bureaucrats" does not have a unified position on the developments in Kyrgyzstan or a mechanism through which it can influence the situation there, TV-Tsentr reported on 21 March. "They failed in Ukraine and Moldova and they are afraid of repeating their mistakes," Belkovskii said. He also said that events in Georgia, Ukraine, and now Kyrgyzstan show that direct disobedience is a more powerful weapon against corrupt regimes than parliamentary opposition. But he added that the nature and possible consequences of the situation in Kyrgyzstan are different from those in the other countries. In Kyrgyzstan, he said, there is real interethnic and tribal conflict that could split the country into northern and southern parts. "If Russia considers Kyrgyzstan a long-term strategic partner, I think the Kremlin should take the side of [Kyrgyz] President Askar Akaev," Belkovskii said. VY
...AS VORONEZH GOVERNOR SAYS HE IS NOT KUCHMA... According to "Kommersant-Daily" on 21 March, the battle between Unified Russia and Motherland in the Voronezh Oblast was particularly fierce. Motherland was reportedly planning a public rally for the day of the vote, 20 March, to protest campaign violations. Local journalists asked Voronezh Oblast Governor Vladimir Kulakov, a supporter of Unified Russia, if he was afraid of "an Orange Revolution," to which he replied, "I am not Kuchma and I won't allow it." In an interview with a local newspaper, Kulakov was asked whether he would use "administrative resources" during the election campaign for Unified Russia, and he responded "Absolutely. I'm interested in a duma with which I can work fruitfully." Unified Russia won 29.1 percent of the vote; Motherland, 21.0 percent; the Communist Party, 13.7 percent; "against all," 11.9 percent; the For Justice bloc, 6.4 percent; and the LDPR, 6.0 percent, according to the oblast election commission's website on 21 March. JAC
UKRAINIAN PRESIDENT IN TURKMENISTAN FOR GAS TALKS
Gas will be on Ukrainian President Viktor Yushchenko's mind on 22 March when he arrives in Ashgabad to meet with Turkmen President Saparmurat Niyazov. Steady supplies of Turkmen gas are critical for Ukraine as it seeks to reform its energy sector, while diversifying its energy supplies. Yushchenko is hoping to cut a deal that will insure that the pipelines remain full.
Ukraine's present contract with Turkmenistan for gas expires by the end of 2006. Beginning in January 2007, most Turkmen gas will go to Russia's Gazprom. The Russian energy company has signed a 25-year contract with Ashgabad that allows it to purchase the majority of Turkmenistan's gas production. Ukraine will then be forced to purchase from Gazprom the 36 billion cubic meters of Turkmen gas it needs annually.
In January, Ashgabad unexpectedly raised the price of gas by 32 percent to $58 per thousand cubic meters. Ukraine almost immediately agreed to pay. Gazprom, however, decided not to buy gas at the higher price and does not seem to be in a hurry to negotiate with Niyazov. This situation places Ukraine in a slightly favorable position in the coming negotiations with Turkmenneftegaz, the state oil and gas company.
The new Ukrainian gas strategy seems to be a multifaceted one. Oleksiy Ivchenko, the new head of Ukraine's oil and gas monopoly Naftohaz Ukrayiny, has put forth a proposal to create a Ukrainian-German-Polish group to sell non-Russian gas to the European Union. The group is exploring the possibility of purchasing Turkmen and Kazakh gas for resale to the EU and thus break Gazprom's monopoly on sales to Europe from the former Soviet Union. The major drawback of this plan is that presently all Central Asian gas is carried in the Central Asia Center trunk pipeline, which goes through Russia to Ukraine and then to the EU.
The German energy giant E.ON is said to be involved in discussions with this group, RIA Novosti reported on 11 March. During his visit to Germany in March, Yushchenko met with E.ON executives along with the head of Ruhrgas, Germany's largest gas company.
Soon after Yushchenko's visit, Deutsche Bank announced a 2 billion euro ($2.6 billion) credit line for Naftohaz, Interfax reported on 9 March. The credit line is to last for five years and the first tranche of $350 million is expected in April.
Another facet of Ukraine's strategy is to expand the number of participants in the consortium that manages the Ukrainian trunk pipeline. This pipeline delivers 80 percent of Russian gas to the EU. The consortium presently consists of Ukraine and Russia, which both hold 50 percent of the shares. The Ukrainian side has proposed to expand the consortium's membership and allow all EU members, as well as Turkmenistan and Kazakhstan, to join.
Ukraine is also exploring the possibility of buying Iranian gas. In an interview with the Ukrainian weekly "Zerkalo Tyzhnya" on 19-25 March, Ivchenko mentioned that there was room for Iran to join the pipeline consortium. Yushchenko has announced his intention of visiting Iran in the first half of the year. One possible topic of discussion in Tehran could be a feasibility study, prepared by the Kyiv-based VNIPI Transgaz Institute, for a 550-kilometer gas pipeline from Iran to Armenia to the Georgian port of Supsa then under the Black Sea to the Crimean town of Feodosia. The cost of the project has been estimated at $5 billion with the capacity to deliver 60 billion cubic meters of gas a year, of which 10 billion would remain in Ukraine.
Also up for discussion is the question of who will be the "operator" of Turkmen gas to Ukraine. Ivchenko told "Zerkalo Tyzhnya" that the present arrangement with the RosUkrEnergo company is not in Ukraine's interests. If Ukraine ends its contract with RosUkrEnergo, it will push Russia's Gazprom out of a very profitable venture. Gazprom is a major shareholder in RosUkrEnergo and, as such, stands to lose millions of dollars. RosUkrEnergo took over the "operator" contract from a Hungarian-registered company, Eural Trans Gas, in January.
The new Ukrainian government is also likely to investigate some of the murkier dealings from the era of former President Leonid Kuchma. On 3 March, Interfax reported that Ukrainian Prime Minister Yuliya Tymoshenko announced that the former senior management of Naftohaz will be investigated by the Ukrainian authorities for "gray schemes" in the transport of Turkmen gas to Ukraine.