The agreement signed puts to an end the problem of Ukrainian debts for Russian natural gas, Russian Premier Mikhail Kasianov, who arrived in Kyiv for negotiations, said on October 4. But the end at the level of premiers may well turn into indefiniteness at the level of states. “The epic that has been agitating society in Russian and Ukraine for as many as two years is almost over today,” Mr. Kasianov said adding: “almost” because this agreement is still to be ratified by Ukraine’s Verkhovna Rada.
Meanwhile, despite some positive points in the agreement signed by premiers Kinakh and Kasianov (in particular, our outstanding payments for natural gas have been defined as a corporate, not public, debt and the Naftohaz Ukrayiny Company, after rescheduling its debts for twelve years, will be paying interests at 4- 5% against the LIBOR+1% rate instead of 10%, as Russia originally demanded), it still has a provision that could stir parliamentary passions. This is about the re- export of gas or, in plain language, the ability of Ukraine to decide by itself what to do with the gas extracted in Ukraine and received from Russia as payment for transit.
Ukraine cannot export gas as long as it is undersupplied with it, Mr. Kasianov pressed his point at a press conference after the end of the Ukrainian-Russian talks. Mr. Kasianov said the agreement reached does not allow Ukraine to export or re-export gas until it amasses supplies sufficient for its own needs. In his words, the two sides intend to annually coordinate their energy balances in order “to make the flows of energy resources transparent.” It follows from Mr. Kasianov’s explanations that Ukraine will be granted the right to make an annual report on the growth of its own production of gas and, accordingly, to receive or not an export quota.
Serhiy Chukmasov, deputy chairman of the parliamentary Economic Policies Committee, told The Day last Friday he had not yet seen the agreement’s text, so it was difficult to judge its contents. But if it really contains a ban on exporting the gas extracted in Ukraine, this “will stir public indignation” during the ratification debate. “As the author of the property sharing law,” the people’s deputy said, “I cannot agree that this agreement should forbid the investors, who have contributed funds to the development of Ukraine’s fuel and energy sector, to legitimately export products they own.”
Meanwhile, just on the eve of these negotiations, Verkhovna Rada urged the government to revise the draft law on ratifying the agreement with Russia on the transit of natural gas across the territory of Ukraine. As Oleksiy Hudyma, chairman of the parliamentary Committee for the Fuel and Energy Complex, Nuclear Policies, and Nuclear Safety, announced, this happened because the agreement contains a what he calls a discriminatory clause banning the export of Ukrainian gas.
“Parliament has taken a step and showed unwillingness to ratify this agreement,” Mr. Hudyma said, commenting to Interfax- Ukraine on the possible ban on natural gas export on the eve of the Kyiv talks. He said Ukraine has the right to export its own gas because it extracts 18 billion cubic meters a year. He also pointed out that the Russian gas Ukraine receives as payment for transit across its territory is the property of Ukraine. In addition, Ukraine is free to use at its discretion gas from Turkmenistan. The parliamentary committee head emphasized that all statements of Russian politicians that Ukraine should not be allowed to export natural gas were valid at the stage when Ukraine was illegally siphoning off the Russian gas in transit. But now that this practice has been done away with, the ban on export “has no logical reason at all.”
Moreover, the government is also aware of a discriminatory nature of the re-export ban. In all probability, during the negotiations the Ukrainian party used such levers as the stationing of Russian troops on the Ukrainian territory. As a Russian delegation member acknowledged to The Day, the irking question of concluding additional agreements on Black Sea Fleet arms control was raised, only to be put off until December, when the logic of winter makes Russian arguments more convincing.
