Naftogaz proposes to industry to agree on purchase of gas from alternative traders, says Naftogaz head

National joint-stock company Naftogaz Ukrainy has proposed that industrial producers agree on the purchase of gas from alternative traders operating on the European market, the Russian market and other countries, according to Yevhen Bakulin, CEO of Naftogaz Ukrainy.

"Today we address you [industrial producers] with a proposal to take part in the settling of the issue of bringing traders to the Ukrainian market jointly with you. We all have an interest in this," Bakulin said at an enlarged meeting of the presidium of the Federation of Employers of Ukraine initiated by Naftogaz Ukrainy on Monday in Kyiv.

Bakulin said that the company remains a guaranteed supplier of gas, including for industrial consumers, and it will ensure there is gas for purchase on the market. The state holding plans to gradually give way to gas supplies by alternative traders to industry.

"We leave households, which consume gas of our own extraction, and heat supply companies, as they have state subsidies, and at the first stage we'll not allow price fluctuations for the heat supply sector. As for industry, we're sure that the future supplies will allow the prices on the Ukrainian market to fall," he said.

Bakulin said that with the price of gas of $430 per 1,000 cubic meters bought from Russia, Naftogaz Ukrainy would manage to import RWE's fuel at the lower price - $380-390.

He added that the liberalization of the market would promote a revision of the conditions of the contract signed by Naftogaz Ukrainy and Gazprom.

"Naftogaz expects that if you manage [industry manages to attract alternative traders] we'll finally cut the price under our contract," he said.

At the meeting of the presidium of the Federation of Employers of Ukraine where representatives of ten sectors - the largest gas consumers – were present the organization decided to take part in searching for new gas suppliers for the Ukrainian market.

The Federation of Employers of Ukraine and Naftogaz Ukrainy will create a coordination board on settling the issue of liberalization of the Ukrainian gas market.

"The Federation of Employers of Ukraine will actively take part in talks on searching for alternative gas suppliers," said the head of the association, Dmytro Firtash.