Naftogaz, RosUkrEnergo Sign Contract

KIEV -- Naftogaz Ukrainy, Ukraine's state-run energy company, said Friday that it signed a contract with Swiss-registered RosUkrEnergo on importing natural gas from Russia, despite efforts by the prime minister to eliminate energy middlemen.

The agreement is for the supply of "around 50 billion of cubic meters of gas this year," Oleksandr Shlapak, the deputy head of staff at President Viktor Yushchenko's office, said at a news conference in Kiev.

"They have signed a contract with RosUkrEnergo for 50 billion cubic meters at $179.50," a Naftogaz spokesman said.

The contract confirms the price per 1,000 cubic meters as agreed earlier -- a rise from last year's price of $130. It also gave Gazprom the right to supply 7 bcm through a subsidiary, as agreed earlier.

RosUkrEnergo, half-owned by Gazprom, is the sole importer of gas to Ukraine under a 2006 agreement that resolved a dispute between the two countries over fuel prices. Gazprom, which supplies 70 percent of Ukraine's gas, cut deliveries in January 2006 after Ukraine rejected its demand to quadruple the price.

RosUkrEnergo mixes more expensive Russian gas and cheaper gas from Central Asian countries like Kazakhstan and Turkmenistan and resells it to Ukraine.

Shlapak said Friday that RosUkrEnergo was "kept due to Russia's request."

Prime Minister Yulia Tymoshenko, who took office in December, is seeking to eliminate RosUkrEnergo from the market, calling it "a corrupted scheme." Last month, Gazprom and Naftogaz said they had agreed to scrap intermediaries.

That agreement ended a monthlong standoff between Russia and Ukraine, in which Gazprom reduced supplies temporarily.