Russia's gas giant Gazprom will discuss the possibility of revising the gas pricing formula for Ukraine only after signing an agreement on merging with Ukraine's energy company Naftogas, Gazprom CEO Alexei Miller said on Thursday.
"We can meet our Ukrainian colleagues half way, but only with the understanding that it will be one company," Miller said, adding that Ukraine insists on decreasing the gas price while Russia is proposing that Gazprom and Naftogaz merge.
The idea of merging the two energy companies was put forward by Russian Prime Minister Vladimir Putin in 2010. Miller said at the time that both companies should seek the merger through joint ventures as the first step towards consolidation, adding that Russia could contribute reserves, while Ukraine could contribute its gas transportation system.
However, in October 2010, Ukrainian Prime Minister Mykola Azarov ruled out a merger between Gazprom and Naftogaz, but welcomed the idea of a joint venture between the two companies to develop gas deposits in the Astrakhan region in southern Russia and in the Yamal region in the Russian Arctic.
"The talks with our Ukrainian colleagues are about the creation of a joint venture, but this proposal only comes from our side. We are talking about [our] readiness to set up a joint venture, the first step, preceding the merger of both companies," Miller said.
Ukraine, which is 100 percent dependent on Russian energy supplies, is seeking to revise a 2009 gas supply contract signed by former Prime Minister Yulia Tymoshenko.
The country is $295.60 per 1,000 cubic meters of Russian gas in the second quarter of this year and expects to pay $350 in the third quarter.
