Tymoshenko Enlists EU Help on Gas

ReutersTymoshenko and Solana addressing a news conference Tuesday in Brussels. She plans to visit Moscow on Feb. 21.
The European Union supports Ukraine's attempt to revise its natural gas agreement with Russia, which would allow the country to sign a long-term accord, Ukrainian Prime Minister Yulia Tymoshenko said Tuesday.

Tymoshenko, who took office Dec. 18, wants to scrap the country's natural gas accord with Russia, raise transit fees for Russian fuel exports to Europe and fees for Ukraine's gas storage and drop gas-trader RosUkrEnergo. She will visit Moscow Feb. 21 to revise the agreement.

"We propose building a formula approach" to determine the gas price, Tymoshenko told a group of journalists in Brussels on Monday. "I have heard the support for this kind of negotiation here today. The EU is interested in forming a long-term pricing policy."

Tymoshenko also used the visit to stress the need for an alternative to the Nabucco project to deliver Central Asian gas to Europe and an EU donor group to help fund the modernization of Ukraine's pipelines, Interfax reported.

Tymoshenko also said she wanted to diversify energy supplies to Ukraine. "For 17 years we have not built any diversified projects,'' Tymoshenko said. "We would like to have new transit Caspian-Black Sea corridor together with investors.''

She requested that the EU consider participation in the so-called White Stream gas project, which would pass the Caspian and Black seas through Ukraine to Europe, Interfax reported.

"This project could be considerably cheaper and more effective, and we want Ukraine and the European Union to be partners in this project," Tymoshenko said, Interfax reported.

Russia supplies one-quarter of Europe's gas, of which about four-fifths travels through Ukrainian pipelines. In 2006, Russia sought to quadruple Ukraine's gas price, and Gazprom cut supplies in the first days of January 2006 after Ukraine rejected the demand. This resulted in shortages in countries including Hungary, Italy and Germany.

"The market has to regulate everything," Tymoshenko said. "It has to be the market, not a political discussion."

Russia doubled the gas price for Ukraine in 2006 and raised it by 37 percent last year and 38 percent this year. Ukraine increased the transit fee for Russia to $1.70 per 1,000 cubic meters of gas per 100 kilometers this year, compared with $1.60 in 2007 and 2006.

"Starting in 2006, Russia has been raising prices of natural gas," Tymoshenko said. "On the other hand, the cost of transit remained almost unchanged."

At a news conference Tuesday in Brussels, EU Trade Commissioner Peter Mandelson said the bloc was planning to negotiate a free trade agreement with Ukraine, calling the accord a high priority. Mandelson said talks would start in the weeks after Ukraine joins the World Trade Organization. Ukraine on Jan. 25 received approval to become the WTO's 153rd member.

Appearing at the same news conference, Tymoshenko asked EU officials to start work on allowing Ukraine to join the EU's electronic customs declarations in the fight against smuggling. Ukraine borders EU members Poland, Slovakia, Hungary and Romania.

"I say 'yes' ... to the question of whether Ukraine is capable of forming solid, long-term and reliable stability," Tymoshenko told reporters after talks with EU foreign policy chief Javier Solana. "'Yes' to harmonious relations between the president, parliament and government and 'yes' to stability."