4. PM YEKHANUROV DISCUSSES PROGRESS IN GAS TALKS WITH RUSSIA WITH AMB’S OF UK, FRANCE, GERMANY AND U.S.

Ukrainian News Agency, Kyiv, Ukraine,
Thu, December 22, 2005

KYIV – Prime Minister Yurii Yekhanurov has discussed Ukraine’s progress in gas talks with Russia with Ambassador of Great Britain Robert Brinkley, Ambassador of France Jean-Paul Veziant, Ambassador of Germany Dietmar Stuedemann and US Ambassador John Herbst. An insider with the government informed Ukrainian News about this.

According to the insider, ambassadors were summoned urgently upon initiative of the Cabinet of Ministers. At the meeting Yekhanurov informed them about the progress of their talks with Russia on gas. In their turn, ambassadors provided official opinions of their counties on this question. “They have a common viewpoint on legal issues,” the insider said.

As Ukrainian News earlier reported, Ukraine is holding active talks with Russia on gas supplies to Ukraine and conditions of its transit through the territory of Ukraine to Europe for 2006. Ukraine wants Russia to justify the
price at which it is asking Ukraine to buy natural gas.

Prime Minister Yurii Yekhanurov said previously that Ukraine is ready to examine an official proposal of the Russian side on changing the contract signed in 2002 concerning the terms for Russian gas supplies to Ukraine and its transit to Europe through Ukraine’s territory.

On December 8, Gazprom announced the intention to increase the prices of natural gas supplied to Ukraine up to USD 160 per 1,000 cubic meters beginning from January 1, 2006.

Gazprom announced on December 14 that it was going to raise the prices of gas supplied to Ukraine to USD 220-230 per 1,000 cubic meters as of January 1, 2006.

In July 2004, Ukraine and Russia agreed on the terms for transiting 112 billion cubic meters of Russian gas through the territory of Ukraine in 2005 at the rate of USD 1.09 per 1,000 cubic meters for each 100 km of transit.

Under the agreement, Russia is to deliver 23 billion cubic meters of gas in 2005 at a price of USD 50 per 1,000 cubic meters as payment for transit services.

In July 2005, Naftohaz Ukrainy and Gazprom agreed to increase the volume of transit of Russian natural gas through Ukrainian territory by 8 billion cubic meters or 7% to 120 billion cubic meters in 2005. -30-

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