Russia Agrees Gas Discount To Ukraine

Russia Agrees Gas Discount To Ukraine
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Τετ, 21 Απριλίου 2010 - 18:40
Russian President Dmitry Medvedev on Wednesday promised his Ukrainian counterpart, newly-elected Viktor Yanukovich, a discount on natural gas deliveries amid warmer ties between the two former Soviet republics.
Russian President Dmitry Medvedev on Wednesday promised his Ukrainian counterpart, newly-elected Viktor Yanukovich, a discount on natural gas deliveries amid warmer ties between the two former Soviet republics.

The move follows an agreement to extend the stay of
Russia 's Black Sea fleet in the Ukrainian port of Sevastopol and is a sign of better relations between Russia and Ukraine since Yanukovich took office in February.

The new gas deal, which was signed by Russian gas exporter OAO Gazprom (GAZP.RS) and
Ukraine 's state energy firm Naftogaz, includes a 30% discount in the form of a lower export duty.

Gazprom said the export duty will be lowered by $100 per 1,000 cubic meters of gas--down from the current price of $330--but no more than 30% of the gas price.
Ukraine will receive 30 billion cubic meters at the lower price in 2010 and 40 billion cubic meters in the following years until 2019.

Gazprom's Chief Executive Alexei Miller stressed the company's profits will be unaffected by the new deal, as the discount is equal to the export duty imposed by the Russian government.

"The price discount is provided by a reduction in the export customs duty for Gazprom in the budget and does not affect the economy of Gazprom," Miller said, according to the Interfax news agency.

Under the new contract, Naftogaz agreed to increase its offtake of Russian gas this year to 36.5 billion cubic meters to fill up underground gas storage facilities for the 2010-2011 winter season.

Ukraine is an important transit country for Russian gas to Europe , which relies on Russia for around a quarter of its gas needs.

The price cut comes at a convenient time for
Ukraine , whose government is striving to revive the country's struggling economy. The country badly needs to secure further lending after its economy declined by 15% last year.

Ukraine 's Deputy Prime Minister Serhiy Tihipko said Wednesday the country hopes to secure a new $12 billion lending program from the International Monetary Fund for the next 30 months.

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