Slovakia signs deal to deliver gas to Ukraine

AP News
Posted: Apr 28, 2014 9:03 AM

BRATISLAVA, Slovakia (AP) — Slovakia signed a deal on Monday to deliver natural gas to Ukraine, which is facing the threat of a cut-off in supplies from Russia because of a massive debt.

Under the agreement, Slovakia will send gas through a pipeline that was meant for transporting gas from Ukraine but is currently unused. To be able to send the gas, some technical changes are needed that might take several months.

The signing of a memorandum of understanding between the Slovak pipeline operator Eustream and Ukraine's Ukrtransgaz is another step in Ukraine's efforts to reduce its dependence on Russia. It has already agreed on gas supplies also from Germany, through Poland, as well as from Hungary. The German supplies, from utility RWE, already started this month.

Slovak officials had previously said Ukraine could get up to 10 billion cubic meters (353 billion cubic feet) of natural gas per year through the pipeline. Slovak Prime minister Robert Fico said Monday it could be up to nine billion cubic meters, about a fifth of Ukraine's gas needs.

The European Commission welcomed the move.

"This is an important first step to diversify Ukraine's sources of gas supply and contributes to greater energy security in Eastern Europe and the EU as a whole," said EU President Jose Manuel Barroso who was present at the signing ceremony together with Fico.

EU Energy Commissioner Guenther Oettinger, who negotiated the deal with Slovak Economy Minister Tomas Malatinsky and Ukraine's energy minister Yuri Prodan, called it "a milestone."

Russia recently raised the price of gas for Ukraine to $485 per thousand cubic meters from $268.50, and President Vladimir Putin has said Russia may start demanding payment in advance — heavy burdens for a country whose finances are near collapse.

Ukraine originally wanted Slovakia to provide the gas through four capacity pipelines that flow Russian gas through Ukraine to Slovakia and Western Europe, but that was rejected amid Slovak fears it would violate a deal with Russia's Gazprom.

Fico called Monday's signature "the best decision politically, financially and legally."