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A Ukrainian energy expert said Russia
A Ukrainian energy expert said Russia came out on top in the recent gas dispute with Ukraine but believes that Turkey could prove to be the outright winner as the EU seeks alternative gas routes.

Russia's gas monopoly Gazprom and Ukrainian energy company Naftogaz signed on Monday a long-awaited contract on gas supplies to Ukraine following a dispute which saw gas deliveries to Europe cut off. The EU called the situation "incredible and unacceptable" and said EU companies could sue Russia and Ukraine if supplies were not restored.

"Today's tactical advantage could actually result in a loss of Russia's strategic national interests. Indeed let's see what conclusions Europe makes," Alexander Narbut, an independent Ukrainian energy expert, said on Friday at an energy round-table in Ukraine.

Narbut said that he believes the real winner could turn out to be Turkey, "Soon we'll find out whether the Nabucco project moves from the dormant phase to the more active," and in any case, he added, the current circumstances mean that Turkey may receive not only economic but geopolitical priority.

The Nabucco pipeline project is being touted as the best option for reducing Europe's dependence on Russian gas. The pipeline is expected to link energy-rich Central Asia to Europe through Turkey, Bulgaria, Hungary and Austria and has been tentatively scheduled to begin in 2010.

However, some energy observers say the pipeline, which will cost an estimated $7-8 billion, could hit difficulties if Turkmenistan, a major gas producer in Central Asia, refuses to support the project.

Moscow is also developing alternative transit routes with construction of the Nord Stream pipeline, a joint project with Germany to pump gas from Siberia to Europe under the Baltic Sea, and the South Stream pipe which will bring gas to the Balkans and onto Europe.

Narbut was scathing about the role played by Ukrainian politicians in the gas row and said that the political infighting could cost the country dearly in the future, "The president [Viktor Yushchenko] and premier [Yulia Tymoshenko] didn't try at these negotiations even to call a truce, or it might have worked out differently."

Under the current price agreement for Russian gas Ukraine will pay $450 per 1,000 cubic meters with a 20% discount agreed between Moscow and Kiev for 2009. Last year Ukraine paid $179.5. The transit tariff paid by Russia remains unchanged.

Narbut said the new gas deal proves that there is "little understanding of how much it could cost the Ukrainian economy. The losses for Ukraine at the lowest annual transit rate are $3.5 billion."

"The fact that the gas transport system will remain in Ukrainian hands means nothing. We understand that at such a pricing level for gas Ukrainian industry will lose its competitiveness, not to mention the other consequences of this failure," the Ukrainian energy expert said.

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