Ukraine Pays Off Debt for Turkmen Gas

[stepanstas]

KIEV, Ukraine ≈ Ukraine has paid off its debt to Turkmenistan for natural gas, an official said Wednesday, but he said that Ukraine must now rely on Russia's Gazprom for deliveries of Turkmen gas.

"Ukraine has resolved the issue. Now it has no debt for Turkmen natural gas deliveries," said Yuriy Krolchuk, spokesman for the state-run gas company Naftogaz.

He said that Ukraine had paid US$10.5 million (euro8.3 million), the amount he said it owed as of the end of August.

After acrimonious talks over what Turkmenistan had said was US$170 million (euro142 million) in debt for 2003-2005, the countries agreed in March that Ukraine would pay off roughly US$88 million (euro74 million) in cash, with another US$58.3 million (euro49 million) to be paid off with supplies of pipes by August, according to Turkmenistan.

Ukraine concluded a deal last December to receive about 40 billion cubic meters of Turkmen natural gas this year, with the price set at US$50 (euro41) per thousand cubic meters in the first half of 2006 and US$60 (euro50) in the second half, but Turkmenistan has delivered no gas, Krolchuk said.

"Turkmenistan sold all its gas to Gazprom. Now we hope for on constructive and successful talks with Gazprom," he said.

Turkmenistan is the second-biggest gas producer in the former Soviet Union after Russia and had been Ukraine's biggest supplier.

Ukraine now gets most of its gas from Russia, buying a mix of Russian gas and gas from Turkmenistan and other Central Asian countries through a Gazprom-linked intermediary at US$95 (euro80) per 1,000 cubic meters.

Source: http://www.chron.com/disp/story.mpl/ap/fn/4183678.html

[stepanstas]

KIEV, September 13 (RIA Novosti) - Ukraine's national oil and gas company, Naftogaz, said Wednesday its losses for 2005 stood at $368 million.

"Naftogaz Ukrainy finished 2005 with losses amounting to 1.842 billion hryvnia," the company said in a news release, citing audit results by the Ernst &Young financial services company.

"As of December 31, 2005, the company's current liabilities exceeded current assets by 9.014 billion hryvnia ($1.8 billion), including tax arrears totaling 5.168 billion hryvnia ($1 billion)."

Naftogaz said it had taken a total of about $1 billion in loans from foreign banks to finance its activities and make investments, as well as to pay off some of its short-term debt. The company said its long-term loans last year nearly doubled, to 7.862 billion hryvnia ($1.37 billion).

Ex-President Oleksiy Ivchenko said in late April the losses of the company, which accounts for 10% of the state budget's revenues, hit $500 million in the first quarter of 2006 alone, whereas the Fuel and Energy Ministry said losses stood at $600 million.

Ivchenko clashed with the Finance Ministry, which rejected Naftogaz's proposal to raise gas prices for households by 60% starting in July. The ministry demanded instead that Naftogaz scale back spending on a number of foreign projects and cut investment in production in Ukraine.

Fitch Ratings said in late April the company expected losses could be as high as $1.5 billion in fiscal year 2006.

It also cited press reports that Naftogaz has accumulated debts of around $700 million for natural gas supplied by Rosukrenergo in February and March, after Naftogaz was forced to sell gas on the domestic market at prices lower than its acquisition price.

Rosukrenergo is a gas transportation company 50% owned by a subsidiary of Russian energy giant Gazprom, with the other 50% being held by Austria's Raiffeisen Bank.

Naftogaz placed the blame for any potential disruptions to gas imports on the government.

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