It became known what Ukraine is ready to do in exchange for Russian cheap gas till the end of 2006, Vedomosti #194 out on Monday informs. Ukraine stated its readiness “to assist” Russian state companies with privatisation of the Ukrainian aircraft and energy industries.

Moscow agreed to negotiate insisting that Ukrainian privatisation and gas price must be considered separately.

In August-September, Ukraine’s PM Yanukovich met Russian President Putin and PM Fradkov. These meetings resulted in RosUkrEnergo’s (Gazprom’s trader) agreement to keep the gas price ($95 per 1,000 cu m) unchanged till the end of the current year. RosUkrEnergo calculated that it would cost it $400 million. Gazprom assisted Ukraine with negotiations on Middle Asian gas supply for 2007. Gazprom declares that the Middle Asian price has not been set yet, but two sources close to the negotiation process, assure it will be $130 per 1,000 cu m.

Such concessions were made “taking into account prospects of extended cooperation” covering not only gas field, the interested parties stated it before. PM Fradkov noticed that forst of all it might be Ukraine’s electroenergetics. Aircraft industry appeared to be second one.

Former official of Yushchenko’s administration is convinced that PM Yanukovich promised to assist Russia with Ukrainian aircraft works’ privatisation in exchange for cheap Russian gas. The existence of such agreement was also proved by the White House’s official. But Moscow does not intend “to mix” it with gas talks as Ukraine has got the Russian gas now and the privatisation will last for years, the WH’s official added. Ukraine’s State Property Fund, Industrial Policy Ministry of Ukraine and the Cabinet could not comment on it as well as Russian Ministry for Industry and Enegry and Russian Industrial Ministry. It was also impossible to connect with PM’s press secretary.

As a reminder, Ukrainian energy sector and aircraft industry are prohibited for privatisation. However, according to the recent info, the State Property Fund and the Cabinet are working on a list of assets for the privatisation program-2007 where these two fields top the list. These fields are the “most ready assets” of Ukraine which may close up $2-miliard budget hole. Former official of Yushchenko’s administration supposes that the in-depth info on this subject will be known after Russian Fradkov’s visit to Ukraine on October 24.


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