26 Jan 2011 17:44

Naftogaz plans to complete return of 12 bln bcm of gas to RosUkrEnergo this year - source

KYIV. Jan 26 (Interfax) - Ukraine's national oil and gas company Naftogaz Ukrainy plans to complete the return of 12.1 billion cubic meters (bcm) of gas to Swiss gas trader RosUkrEnergo (RUE) in stages over the course of this year, a government source told Interfax.

"The entire volume of gas will be fully returned in 2011," the source said.

That the gas will be returned gradually is a function of export contracts with Gazprom , to whom RUE sells the gas.

The amount of gas Ukraine has stored underground and planned 2011 gas purchases will allow the country to make it through this winter and get ready for the next one without difficulty, the source said.

A highly placed source at Naftogaz told Interfax that it might in fact take several years for the entire amount to be returned.

"The withdrawal of 12.1 bcm of gas from underground storage for subsequent transfer will be carried out in accordance with RUE requests and Naftogaz's technical capabilities. Accordingly, the probability that the process will be carried out over several years is quite high," the source said.

Return of the gas will not affect supplies to Ukrainian consumers, he said.

At the end of November, Naftogaz, RUE, and Gazprom announced the complete settlement of a dispute over Ukraine's return of 12.1 bcm of gas. According to the agreements struck, Naftogaz is to comply with the ruling of a Stockholm arbitration court and return 12.1 bcm of gas to RUE, and RUE is to pay off $1.7 billion in debts to Naftogaz and $810 million to Gazprom.

Ukrainian businessman and RUE cofounder Dmitry Firtash said the Swiss company has already transferred to Naftogaz $1.7 billion of debt transferred to the state holding by Gazprom in 2009. Firtash said Naftogaz has also received $450 million for services rendered in the transit and storage of RUE gas.

The natural gas needed by Naftogaz Ukrainy will be purchased from Gazprom for $230 per 1,000 cubic meters. All the 12.1 billion bcm will be exported to Europe by the company Gazprom Export, Firtash said.

That amount of gas will be taken out of underground storage in Ukraine in phases, so as to avoid upsetting the country's gas balance.

RosUkrEnergo was set up in the summer of 2004 by Gazprom and Centragas Holding AG on a 50-50 basis. Centragas Holding is owned by Ukrainian businessmen Firtash (90%) and Ivan Fursin (10%). RosUkrEnergo was the monopoly gas-supplier to Ukraine in 2006-2008.

Naftogaz Ukrainy unites major Ukrainian oil and gas extraction companies. The holding holds a monopoly over the transit and underground storage of natural gas, and also over the transportation of gas by pipeline in the country.