Eurasian Integration Yearbook 2012

Natalia Maqsimchook. “Chronicle of EurasianRegional Integration 2011”2011: Data and ReviewsMoreover, Gazprom CEO said that Russia would make maximum useof Ukraine’s pipeline capacity. The current loading level stands at around95 billion m 3 per year, but with investment the capacity of Ukraine gastransportation system could increase to 125 billion m 3 per year. According toMiller, the system could potentially carry up to 140 billion m 3 of gas annually.Miller said that Ukraine’s gas transportation infrastructure requires seriousinvestment over the medium term and that the country should decide howto develop the industry. In 2010 Ukraine allocated $212 million to themodernisation of its gas transportation system and plans to allocate $300million more in 2011.Note:Russian Prime Minister Vladimir Putin suggested merging Gazprom and Naftogaz at a Ukrainian InterstateCommission economic cooperation meeting in April 2010 in Sochi. In December 2010 Gazprom headAlexei Miller and Ukraine’s Minister for Energy and the Coal Industry Yuri Boiko agreed to establish two jointventures, one to produce coal-bed gas in Ukraine and the other to develop the Pallas gas field in the Black Sea.Gazprom and Naftogaz also signed a memorandum of understanding on the production of methane from coalseams. Gazprom’s Board of Directors instructed the company’s executives to continue working with Ukraineon establishing hydrocarbon joint ventures.Kommersant, RIA NovostiGazprom: Ukraine may benefit from pricing within Customs UnionApril 7, 2011According to Gazprom estimates, Ukraine could save around $8 billion annuallyif it joined and benefited from the price regime in the CU. Ukraine currentlyreceives gas priced according to a European price formula.Whether or not Ukraine will join the CU depends on the country’s negotiationson a free trade area with the EU.The Ukrainian authorities have repeatedly said Gazprom’s prices areunaffordable for the country’s economy and demanded revision of existing gascontracts. Although Kyiv has already received a discount of $100 per 1,000 m 3of gas, the Government of Ukraine believes the cost is still too high. Ten-yearcontracts for Russian gas supply to Ukraine and its transit through the countrywere signed by Gazprom and Naftogaz in January 2009. The gas contract allowsfor quarterly price changes, which are calculated according to the generallyaccepted European formula.In April 2010 the two sides agreed a 30% discount on the gas price for Ukrainewith a maximum discount of $100 per 1,000 m 3 . In return, Ukraine extendedthe lease allowing Russia’s Black Sea Fleet to be stationed in Crimea.Eurasian Development Bank265