RWE and Naftogaz Open Talks on Supply

Ukrainian national gas company Naftogaz Ukrainy has announced that it has opened talks with German supplier RWE, as part of its plans to diversify supply away from Russia's Gazprom.

As part of these discussions, the company said that it had signed a framework agreement with RWE. Under this framework, RWE Supply & Trading would supply Ukraine with gas.

Ukraine has previously stated that it would turn to RWE for supply in order to break its dependence on Gazprom, currently the supplier of the majority of Ukraine's gas needs.This may create a situation whereby Ukraine would be able to buy Russian gas from RWE, thus bypassing any need to purchase the same gas from Russia, the Ukrainian PM said in March.

"(Ukraine) will in fact buy Russian gas from the German company, and this will be cheaper than directly from Russia," Prime Minister Mykola Azarov said.

"Ukraine is buying much more Russian gas than Germany does, and at the same time it has to pay a much higher price, although our economic indices are much lower than in Germany."

The exact parameters of the sale of gas from RWE to Naftogaz has yet to be outlined and will be determined in the future, Nafotgaz said, through individual contracts.