Gas price for Ukraine in 2013

| Foreign Markets |

We keep up-to-date with the situation on the Eastern markets, but our primary focus are the events in Ukraine and Russia. Recently our attention was drawn by the latest news about gas price for Ukraine, expected to reach USD 352/1000 m3.

Price for Ukraine

According to Ukrainian and European media, delivery of gas to Ukraine is estimated at 40 billion cubic meters, as compared to over 14 billion cubic meters expected to be used in 2013 in Poland. The price does not concern the gas meant for fertilizers' manufacturing companies owned by Mr D. Firtash, circa 8 billion cubic meters of gas.

fire/fot. freepik.comHow are the rates set?

The price of gas for Ukraine is calculated on the basis of the contract signed in January 2009 by Russian Gazprom and Ukrainian Naftogaz. The contact is valid over a 11-year period. The price is updated quarterly based on the prices of petrochemical products in the previous 9 months. The price includes a rebate granted in exchange for the 25-year lease of Ukrainian sea ports in which Russian navy is stationed.

The above information is crucial from the point of view of Polish fertilizers-chemical companies, because it should be taken into consideration while planning corporate strategy in 2013.