Ukraine starts gas shipments from Europe in November, says premier

Ukraine started shipping natural gas from Europe in November, Ukrainian Prime Minister Mykola Azarov has said.

"Yes, we have started such shipments, they are not large, but they have started," he told journalists in Kyiv on Tuesday.

The premier noted that the current key task is to work through all the technical details and work out how much gas can be received this way.

On November 1, the international Argus Media agency reported with reference to an official of Ukraine's national oil and gas company Naftogaz Ukrainy, Pavlo Afanasyev, that Naftogaz and Germany's RWE signed a contract for the delivery of about 1 million cubic meters of natural gas per day during November-December of this year.

According to Afanasyev, the gas will be supplied to Ukraine from Poland via Drozdovychi, through one of the gas pipelines that link the two countries. He told Argus Media the price of the gas imported by RWE will be a little bit less than the price for Russian gas bought by Naftogaz Ukrainy from Gazprom under a long-term contract.

Per a two-month contract the parties will be able to discuss a long-term agreement on the delivery to Ukraine of natural gas by reverse flow.

In May of this year Naftogaz Ukrainy and RWE Supply & Trading GmbH RWEST concluded a natural gas sales framework agreement. It lays out the legal structure for possible natural gas shipments from RWEST.

The agreement lays out the grounds for possible natural gas deliveries by RWEST. Prices, amounts, and party obligations will be determined by other contracts after their coordination and signing by the two companies.

Due to high prices on imported Russian gas and Gazprom not wanting to revisit the pricing parameters written into the January 2009 agreement, Ukraine is looking to diversify its energy sources.

In accordance with plans and the announcements by Gazprom of a substantial decrease in the transit of Russian gas to Europe through Ukraine's gas-transport system, Kyiv is looking to use its own gas-transport capacity in a reverse direction.

At the end of last month, senior engineer at Ukrtransgaz Oleh Mykhalevych said that the country's gas-transport system is ready to receive as much as 5 billion cubic meters of gas from Europe. The company has already implemented measures necessary for this.

Experts say that Ukraine can buy on European spot markets and import though Slovakia up to 20 billion cubic metes of natural gas a year, starting in 2015-2016.