Ukraine gas deal not yet signed

The deal between Russian gas giant Gazprom and a Ukrainian trading firm that ended the European gas crisis in January has still not been formally agreed.

Energy analysts said that the agreement could unravel as it was not legally binding. This could again provoke Gazprom into turning off gas supplies to Europe, most of which go through Ukraine.

A Ukrainian diplomat in London confirmed that the Ukrainian parliament had still not ratified January's agreement between Rosukrenergo and Gazprom. Elections in the former Soviet bloc state last month took place before ratification.

The government has since been in a state of paralysis as President Viktor Yushchenko and former prime minister Julia Tymoshenko try to form a coalition government. Analysts said while the agreement remained unratified, both sides could try to renegotiate the terms.

Under the agreement, Gazprom has been selling gas to Rosukrenergo for the $230 per thousand cubic metres it had originally demanded in January. Ukraine had been paying around $60 per thousand cubic metres last year, which Gazprom said was below the market rate. Rosukrenergo will mix this gas with cheaper gas from Central Asia, selling all the gas on to Ukraine for $95 per thousand cubic metres. These prices need to be renegotiated in July.

Stephen O'Sullivan, co-head of research at United Financial Group in Moscow, said: "There is still the prospect of continued uncertainty over gas supplies from Russia because the agreement made between Rosukrenergo and Gazprom has still not been ratified by the Ukranian parliament."

More details of the ownership structure of Rosukrenergo em-erged last week. Half the company is owned by Gazprom itself, but a newspaper owned by the gas giant revealed that most of other half belongs to a Ukrainian businessmen, Dmytro Firtash.