Making a plan: Yulia Tymoshenko
Ukraine to build record gas buffer
Ukraine, its consumption of imported gas sharply down amid economic crisis, intends to pump 19.5 billion cubic metres of gas into underground reserves, Prime Minister Yulia Tymoshenko said.
The proposed figure, cited by the prime minister on a trip outside Kiev, exceeds record reserves of 17 Bcm achieved last year - volumes which helped Ukraine weather a three-week "gas war" with Russia earlier this year.
"It is vital for us to pump 19.5 Bcm - this is our stability, our prosperity for next year," Ukrainian media quoted Tymoshenko as saying.
"There will be no fear of any crisis if 20 Bcm of gas is stored. This is the model we have to build with Russia."
Reuters said Tymoshenko did not say where the government or state energy company Naftogaz would secure funds for the gas.
Officials have said $5 billion was needed to ensure stocks and Naftogaz said it intended to seek funds from the government, which may secure credits from state banks.
Tymoshenko said she would discuss cutting levels of contracted purchases from Russia at talks in Moscow this week with her Russian opposite number, Vladimir Putin. She gave no figures.
"We will be discussing the issue of reducing Ukraine's consumption of gas," the prime minister was quoted as saying. "I'm certain we will be able to adjust plans for consumption."
Naftogaz has said it intended to buy 33 Bcm from Russian giant Gazprom instead of 40 Bcm.
Naftogaz and Gazprom clinched a 10-year supply contract in January after the conflict over prices and payment arrears. Under its terms, Ukraine won a 20% discount from European market prices for this year only.
President Viktor Yushchenko's office, generally highly critical of the prime minister, supported Tymoshenko's actions for increasing storage volumes.
"The government's plans are logical as these are key volumes." the president's energy adviser, Bohdan Sokolovsky, told a news conference.
"These volumes are needed to ensure stable operation of the gas network and stable supplies for Ukrainian consumers."
In the first quarter of 2009, imports of gas from Russia totalled 2.5 Bcm against 5 Bcm called for in contracts. Gazprom has warned Naftogaz it could impose penalties for the failure to use contracted volumes.