Turkmen-Ukrainian teams discuss oil-and-gas cooperation

A top ranking Ukrainian delegation headed by Fuel and Energy Minister Ivan Plachkov arrived in Ashgabat on October 11. Accompanying the Minister was his first deputy, Board Chairman of the NJSC Neftegaz Ukrayiny (Ukraine Oil and Gas) Alexey Ivchenko.
According to the Ukrainian Embassy in Ashgabat, prior to the visit, Plachkov and President Viktor Yushchenko had raised the issue of cooperation with Turkmenistan due to the pressing need to prepare the Ukrainian fuel and energy complex for the autumn-winter period, as well balancing the supply of natural gas for the future.

On October 12, at a meeting with Turkmen Vice Prime Minister, Oil and Gas Minister Guichnazar Tachnazarov, the guests from Kiev discussed cooperation in the oil and gas sector. They discussed the prospects of gas supplies to Ukraine, as well as the repayment of amounts still unpaid for supplied Turkmen gas. The potential of developing Turkmen-Ukrainian gas transfer facilities was on the agenda of the meeting with Turkmen President Saparmurat Niyazov.
In 2005, Neftegaz Ukrayiny -- under a direct sale contract with the State Trading Corporation (STC) Turkmenneftegaz -- was bound to purchase in the current year 36 bn cm of natural gas at $ 58 per 1,000 cm. The contract provided for payment on parity currency-commodities terms, a norm to Turkmenistan. Ashgabat received the money without delay.

In addition, Ukraine was to supply to Turkmenistan machinery (mostly agricultural), pipes and fertilizers to the amount of $ 913 mm. However, the Ukrainian side failed to meet their barter obligations in the first half of 2005.
This summer, Ashgabat claimed that the agreement had been broken. For this reason, the Turkmen government decided to abandon commodities trading and since July 1 only accepts currency payments, at a reduced price of $ 44 per 1,000 cm.

Today, Ukraine still owes Turkmenistan near $ 600 mm. Next year, Ukraine is planning to expand the purchase of Turkmen gas to 39 bn cm. According to Turkmenneftegaz, for this year, over 33.2 bn cm of natural gas have been transported from Turkmenistan.
Of all Turkmen gas, Iran gets 11.3 % and the Central-Asia Central gas pipeline receives 79.5 %, of which Ukraine gets 72.6 %.