Turkmenistan Renews Gas Relations With Ukraine, Europe

KYIV, Ukraine, February 13, 2013 /PRNewswire/ --

Turkmenistan will renew gas supplies to Ukraine and countries of Europe according to the memorandum of understanding, signed between Ukrainian Naftogaz and Turkmen Turkmengaz state companies. The bilateral memorandum was finalized during the official visit of the President of Ukraine Viktor Yanukovych to Ashgabat on February 13, 2013. "I confirmed Ukraine's interest in renewal of gas supplies from Turkmenistan and readiness to deepen cooperation in the area," stated President Yanukovych.

The document will regulate broadening of cooperation between the two companies and stipulate further gas exploration in Turkmenistan, commented Minister of Energy and Coal Industry of Ukraine Eduard Stavytskyi. Ukraine plans to participate in open bids for the right to explore Turkmen gas fields, added the minister.

Gas from Turkmenistan may be delivered using the pipeline running across northern Turkmenistan and the territory of Russia, said Minister Stavytskyi. Previously, Turkmen gas was delivered to Ukraine through the Russian territory.

Ukraine started buying Turkmen gas in early 1990s, after the dissolution of the USSR. The most recent five-year-long contract with Turkmenistan expired in 2006.

Under the conditions of the bilateral agreement, Ukraine purchased from its Asian partner 36 billion cubic meters of gas per year, paying in goods and cash. At the time Turkmenistan was the largest supplier of gas to Ukraine, while Ukraine was the main customer of Turkmen gas. In 2011, Ukraine briefly imported Turkmen gas, along with Uzbek and Kazakh gas, through third parties.

Currently, Ukraine's major gas supplier is Russia. Ukrainian officials made numerous statements regarding the strain that high price for Russian gas put on Ukrainian economy. As Ukraine is looking into cutting domestic gas consumption, boost production and find new gas suppliers, it introduced the State Program on Energy Efficiency 2010-2015. Just in January 2013, the country's energy minister informed about plans to purchase gas from Slovakia, in addition to the newly established supply of gas through Polish pipelines.

To further reduce Ukraine's dependency on gas import the country signed up global energy leaders - Shell, Chevron, and ExxonMobil - to develop domestic energy resources in western and eastern regions of the country, as well as the Black Sea shelf. Additionally, Ukraine is implementing a program of substitution of natural gas with locally produced coal, using Chinese technology.