December 4, 2019 / 7:05 PM / 2 months ago

UPDATE 1-Russia says Ukraine's proposed gas transit tariffs are too high

(Recasts with Putin comment, Ukrainian reaction)

By Vladimir Soldatkin

SOCHI, Russia, Dec 4 (Reuters) - Moscow on Wednesday said transit tariffs proposed by Ukraine to ship Russian gas through its territory next year were unacceptable and too high, claims swiftly dismissed by Kiev.

Ukraine is a key transit route via which Russian gas reaches Europe but a current deal between the two post-Soviet countries expires at the end of the year. Time is running out to hammer out an agreement with relations tense since Moscow annexed Crimea from Ukraine in 2014.

Speaking in the Black Sea city of Sochi, Russian President Vladimir Putin said Moscow was ready to continue exporting its gas to Europe via Ukraine but that it deemed the conditions offered by Kiev unacceptable.

His comments came after Alexei Miller, the CEO of Russian gas giant Gazprom, said the new Russian gas transit tariffs proposed by Ukraine for 2020 were too high.

“The tariffs are very, very high,” Miller said. “They are significantly higher than the current tariff at which we are now supplying gas through the territory of Ukraine.”

Yuriy Vitrenko, executive director at Ukrainian state energy firm Naftogaz, later countered Miller’s claim, saying that the tariffs Russia deemed too high had been calculated using standardised European methodology.

“The transit calculations that have been shown to Gazprom and which the Russian side is commenting on only cover the adjusted costs of Ukraine’s gas pipelines operator,” Vitrenko wrote on Facebook. “Therefore the tariff cannot be considered high.”

Naftogaz said in September that the tariff imposed on the transit of 60 billion cubic metres (bcm) of gas — a volume proposed by Ukraine and the European Union — would stand at $2.67, without value-added tax (VAT), per 1,000 cubic metres of gas transportation through 100 km of Ukrainian territory next year.

For a gas transit of 90 bcm, that figure was seen at $2.13. (Reporting by Vladimir Soldatkin in Sochi and Natalia Zinets in Kiev; writing by Gabrielle Tétrault-Farber; Editing by Kirsten Donovan)

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