Boyko refutes Ukrainian ‘gas myths’

RPU Press Service
October 7, 12:36

During an appearance on the live program “I Think So” on TV 1+1, Yuri Boyko, the head of the
Republican Party of Ukraine, refuted the notion that Ukraine has depended on Russia in
gas-related issues.

“Our country’s gas supplies are completely adequate,” he said. “According to legislation in
effect in Europe, a country must have three sources of gas. Gas from Russia is an integral part
of Ukraine’s supplies of gas from a third source,” he said.

“We do not have a single problem with Russia. Any problems are fiction. It is not necessary to
scare the people with frightening claims that we depend on Russia,” he said. “We do not depend
on her: Russia is our partner,” Boyko stressed.

He said that Ukraine has signed agreements to fix prices and transit rates for the next 5 years.
In the meantime, he did not exclude the possibility of Russia proposing a new price for gas
supplies when it came to signing a tariff agreement for the next year. But Boyko said, “Russia
does not have grounds to do that.”

He noted that, “It would be more profitable for her to export the gas to markets from which
Russia could obtain a higher price, and just pay Ukraine for the transit. However, our utilities
sector would not survive the impact of such a move.” He said. “Therefore, our task is to
champion a price of $50 per cubic meter.”

Boyko also explained the mechanism of founding and operating RosUkrEnergo, an intermediary
company in the gas market. “It is necessary to go back to April 2003 in order to understand how
intermediaries operate in the gas area. At that time, Turkmenbashi [the leader of Turkmenistan]
signed an agreement to sell all Turkmenistan’s gas to Russia’s GazProm. This agreement was for
60-80 billion cubic meters annually over a 25-year term.

RosUkrEnergo proposed a compromise between the Russian energy giant GazProm and the Ukrainian
company NaftoGas. RosUkrEnergo was a partnership between GazPromBank and a subsidiary,
Reifeizenbank. It expanded Ukraine’s gas transit capacity to over 60 billion cubic meters
annually, making it possible for us to obtain Turkmenistan gas for 25 years,” Boyko said.

He said he would “applaud if the new Ukrainian leadership could reach an agreement directly with
Turkmenbashi.”

Boyko dispelled another myth widely circulated in the Ukrainian press pertaining to the
construction of a Russian-German pipeline in the Baltic Sea. “Schroeder and Putin signed an
agreement on the construction of a pipeline that would supply gas from the Stockman deposit in
Russia. It has nothing to do with our country. Russians are building this pipeline for
themselves, to supply gas for Europe,” Boyko said.