Bloomberg News

Ukraine Signs Framework Deal With RWE to Diversify Gas Imports

May 11, 2012

Ukraine’s state-owned energy company NAK Naftogaz Ukrainy signed a framework accord with RWE AG (RWE) for natural-gas imports as the country seeks to diversify supplies.

The agreement with Germany’s second-biggest utility was signed this month and provides for the possibility of gas imports to Ukraine, Naftogaz, based in the capital Kiev, said today in e-mailed statement. Separate contracts will be needed to specify volumes and price, the company said.

Ukraine relies on Russia for about 70 percent of its annual natural-gas use of 52 billion cubic meters and has been in talks since 2010 with Russia’s OAO Gazprom on cutting prices and volumes under an existing 10-year accord. To buy gas from RWE, Ukraine would need to arrange facilities to transport fuel from west to east, said Volodymyr Omelchenko, an analyst at the Razumkov Center for Economy and Political Studies.

“Volumes of deliveries could be under 3 billion cubic meters into Ukraine,” Omelchenko said by phone from Kiev today. “This is quite significant but not critical for Ukraine and won’t impact the policies of Gazprom on revision of the existing contract.”

To contact the reporter on this story: Kateryna Choursina in Kiev at kchoursina@bloomberg.net;

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net


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