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Ukraine, Russia reach 2009 gas price agreement

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Kiev and Russia's state-run energy giant Gazprom have reached an agreement on natural gas prices for Ukraine in 2009, Ukrainian Prime Minister Yulia Tymoshenko told a Cabinet meeting on Wednesday.
KIEV, July 23 (RIA Novosti) - Kiev and Russia's state-run energy giant Gazprom have reached an agreement on natural gas prices for Ukraine in 2009, Ukrainian Prime Minister Yulia Tymoshenko told a Cabinet meeting on Wednesday.

After a meeting in Kiev on Tuesday with Gazprom CEO Alexei Miller, Tymoshenko said: "We have found a way to set [natural gas] prices for next year."

She said the final gas price for 2009 would be announced after Gazprom has held talks with Turkmenistan and Kazakhstan.

Ukraine's gas balance amounts to 75 billion cubic meters in 2008, including 55 billion cubic meters of gas imported from Central Asia. The 2008 gas price for Ukraine is $179.5 per 1,000 cubic meters.

Tymoshenko also said that a market gas price would be introduced for Ukraine gradually over the next few years.

"It will be no shock," she said.

Miller said late in June that the natural gas price for Ukraine could exceed $400 per 1,000 cubic meters if Central Asian gas producers agree to switch to average European prices. Gazprom and Ukraine plan to establish a working group that will draw up the necessary contracts.

Tymoshenko also pledged Ukraine would have enough gas in its underground storage systems for next fall and winter.

"We have so far pumped 8 billion cubic meters. If all the agreements available come into effect, we could finally pump 14.5-15 billion cubic meters, to be owned by [Ukraine's national energy company] Naftogaz," the Ukrainian premier said.

Ukrainian underground gas storage systems have a capacity of 32.5 billion cubic meters. Naftogaz held small quantities of gas when supplies were handled by Swiss trader RosUkrEnergo and its subsidiary, UkrGazEnergo. Now that Ukraine and Russia have switched to direct natural gas supplies, Naftogaz is entitled to a significantly larger portion of underground gas storage.

Gazprom's Kiev-based subsidiary, Gazprom Sbyt Ukraine, has supplied natural gas to Ukrainian companies controlled by Dmitry Firtash, a co-owner of RosUkrEnergo.

Ukraine uses gas from its underground storage facilities for transit to Europe and for domestic consumption.

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