GAS SITUATION IN UKRAINE UNDER GOVT'S CONTROL - TYMOSHENKO

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The government is in control of the situation on the natural gas market of Ukraine and ensuring the energy security of the country, according to Prime Minister Yulia Tymoshenko's letter to President Viktor Yushchenko, which was published on the government's website.

The gas supplies to Ukraine were back to normal on March 5, the letter says, with Ukraine's national interests intact.

The government guarantees gas supplies to both industrial and private consumers as well as stable transit of the Russian gas to the EU via Ukraine.

"I am convinced we will reach an agreement with our Russian partners in the nearest few days concerning the contracts and mutual payments as well as eliminating dubious mediators and misunderstandings in the future, " the premier said.

According to Ms. Tymoshenko, Ukraine's gas market was almost in shambles after the state gas company Naftogaz of Ukraine was brought to the verge of bankruptcy and no new gas contracts were signed as of close 2007. According to the premier, the Cabinet of Ministers has succeeded in rescuing the company and normalizing the branch's functioning. The Prosecutor General's office has already launched an investigation into large-scale power abuse on part of the former Naftogaz managers, Ms. Tymoshenko's letter said.

The premier assured the head of state that she will abide by the agreements reached by the Presidents of Ukraine and Russia February 12 as regards the expediency of normalizing the two countries' relations in the gas domain.

However, the Cabinet of Ministers cannot agree to some of the terms of those agreements, namely, the purchase of the Russian natural gas for USD 315.6 per 1,000 cu. m. upfront in the first quarter of 2008, the replacement of one mediator by another by creating a new joint venture to sell the imported and domestically extracted gas in Ukraine and discarding Naftogaz as the gas distributor on Ukraine's internal market by setting gas supply agreements with the joint venture importing gas and a new joint venture . Compliance with the afore-mentioned terms, according to the government and independent experts, will lead to corruption and abuse eventually resulting in Naftogaz's bankruptcy, the premier warned.

In view of this, the government proposes a number of additional measures to protect the national interests of Ukraine and eliminate prerequisites for corruption on the gas market, while taking into account "logical, transparent and legal interests of the Russian "Gazprom"", the letter says.

The Cabinet of Ministers has assigned Naftogaz to conduct negotiations as regards direct, unmediated gas contracts with "Gazprom Export" company.

Naftogaz is ready to sell natural gas on Ukraine's internal market without any mediators' assistance, Prime Minister Yulia Tymoshenko's letter to President Viktor Yushchenko said.

UKRINFORM