Ukraine continuing gas imports via Poland

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KIEV, Ukraine, Jan. 21 (UPI) -- Ukraine continues to import European natural gas via Poland as it seeks to break the stranglehold of Russian supplies, Kiev's energy minister says.

Ukrainian Energy and Coal Industry Minister Eduard Stavitsky said Friday the state-owned gas company Naftogaz is still receiving supplies under a contract with German utility RWE via reverse flows from Poland, Interfax-Ukraine reported.

"For now we are getting gas via Poland only ... and we are working on two more routes," he said. "Something will be known about them very soon."

Naftogaz in November struck a deal with RWE to supply it with 56 million cubic meters of natural gas over a two-month period via Poland through the reversing one of the lines that connecting the two countries' transmission systems at Drozdovychi.

The German company wouldn't confirm the price it is getting from Naftogaz but local media reports claimed it is cheaper than those charged by the Russian company Gazprom, which is fetching what Ukraine considers to be an exorbitant rate of $426 per cubic meter, British energy analysts ICIS Heren reported.

Ukraine has already purchased about 57 million cubic meters from RWE via Poland, but the arrangement is continuing, Stavitsky said.

Naftogaz in May signed an agreement with RWE creating a legal framework for the importation of natural gas supplies from the German utility -- a deal that wouldn't contain binding purchase or supply commitments, such as required by Gazprom.

News of the framework agreement came after Ukrainian Prime Minister Mykola Azarov in March told the German newspaper Die Welt that if Ukraine can't reach an agreement with Gazprom on renegotiating its current gas contract, it could buy Russian gas from RWE through reverse flows.

The throughput capacity at Drozdovychi is about 4 million cubic meters a day.

Meanwhile, Stavitsky said another deal to import RWE gas via Hungary hadn't begun while two more reverse-flow European gas routes are being considered, ITAR-Tass said.

In November, Stavitsky's predecessor, Yuriy Boiko, said Ukraine was to start importing natural gas through Hungary on Jan. 1.

"The current shipments of gas (from RWE) go through the territory of Poland," he told the Inter television channel at the time. "Starting from January 1, the supplies will go through the territory of Hungary... We have done a great job, have held talks with the countries that have received permission from regulators and bought the capacities."

He said Ukraine hoped to save $2 billion via the purchase of 5 billion cubic meters of western natural gas through long-term contracts.

Experts told Interfax-Ukraine that Kiev could also use reverse flows via Slovakia to buy up to 20 billion cubic meters of natural gas per year on European spot markets though Slovakia starting in 2015-16.

However, progress on Slovakian front has been slow, ICIS reported.

The analysts said a recent tender held by Slovak transmission system operator Eustream showed no market interest, with Eustream unlikely to press ahead with plans for a new pipeline without booked transmission capacities.