Ukraine minimizes purchases of Russian gas

eurodialogue ^ | 11.08.2013 | Bulletin of the Cabinet of Ministers of Ukraine

[WhiskeyX]

According to Prime Minister Mykola Azarov, the gas contract that was signed back in 2009, Ukraine overpaid to Russia almost 20 billion USD.

[....]

The diversification of gas supplies to the Ukrainian market is underway. This is largely due to the fact that the gas prices of Russian OAO Gazprom for Ukraine are significantly higher than for most European countries, although Ukraine is one of the largest consumers of Russian gas, one of the direct neighbors, and buys large amounts of gas in spring and summer. All this leads to the situation where it is more advantageous for Ukraine to buy gas in Europe than in Russia.

[....]

The leading American consulting company IHS CERA has completed a review of the Ukrainian gas potential. The study was commissioned by the Ukrainian Government in 2012. It concluded that in 2015, production of gas in Ukraine would increase due to significant investments from domestic and foreign investors, as well as through the use of modern technology. This will lead to an increase in domestic gas production by about 14 billion cubic meters annually in 2025 and 26 billion cubic meters in 2035.

Ukraine currently produces about 20 billion cubic meters of natural gas annually. According to the forecasts of the Ministry of Energy and Mines, by 2017 Ukraine will be able to increase its gas production by 34.6%, up to 27 billion cubic meters annually.

[WhiskeyX]

This article published in November 2013 illustrates the long-standing existence of the dispute about Ukraine's alleging billions of dollars of overpayments to Gazprom to avoid interruptions in service. The article also notes how the Ukraine's domestic production of natural gas supplies threatened Russia's future ability to use the Russian natural gas supplies as leverage to destabilize the Ukrainian economy and the Ukrainian governments.

[Steven Tyler]

Frack baby, frack