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Gazprom believes it sells gas to Ukraine at
the European market price.
The Russian gas giant also claims that the prices paid by the former Soviet
states should achieve
netback parity with the European exports.
However, for more than three years, Ukraine is buying gas at the prices a way
above the equal netback level.
Gazprom
management's discussion for Q1-2009 reported the gross average
price of gas sold to the countries other than Russia and the former
Soviet states at $382.7 per mcm (a year later, because of the change
of reporting format, the price was
raised to $392.3). A straightforward equal netback approach
should assume the Q1-2009 price of gas at the Russian-Ukrainian
border at about $383/mcm minus the cost of international transit,
including the cost of crossing Ukraine. In fact, the fair price
should have been lower because Naftogaz was the biggest importer of
Russian gas and on top of that the Ukrainian company was providing
free gas storage services to Gazprom (the real market price can be
determined only by competition).
Surprisingly, the
Gazprom-Naftogaz contract of January 19, 2009 has set the full
price of Russian gas for Ukraine at $450 per mcm. Adding the cost of
international transit would put the price of gas at the Czech-German
border at above $500!
Vladimir Putin has explained this phenomenon at a
meeting with German journalists: "Just consider: as for Romania
the price of gas is $470 in the first quarter, minus transport, it
makes up $450 per 1,000 cubic metres".
If Mr. Putin is correct, then the price of gas for
Ukraine is not European. It is Romanian.
Mikhail Korchemkin
East European Gas
Analysis
Malvern, PA, USA
May 3, 2012
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Analysis or www.eegas.com
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