Price details unclear in murky Russia-Ukraine deal

By Amie Ferris-Rotman - Analysis

MOSCOW (Reuters) - Who pays and who profits from Sunday's apparent agreement on a new gas relationship between Russia and Ukraine?

In a normal, commercial world, it should be easy enough to work out. But the complex, opaque nature of the two nations' gas dealings and the lack of full detail about the outline agreement makes it very hard to be certain what is really happening.

Russian Prime Minister Vladimir Putin said Moscow had agreed to sell Kiev gas this year at European prices less a 20 percent discount for 2009, moving to full European prices in 2010.

In return, Kiev would charge Russia the same amount as last year for the transport of export gas across its territory to Europe. This fee would increase to a "market level" next year.

However, neither the "European prices" for gas nor the "market level" for the transit fee have been publicly defined.

Kiev paid $179.50 per 1,000 cubic metres (tcm) for Russian gas last year. Current prices paid by European countries for Russian gas range between $240 and $300 per tcm, according to Ukrainian President Viktor Yushchenko. Russian sources put the range somewhat higher.

Further complicating matters is the role of a little- understood Swiss-domiciled intermediary company, Rosukrenergo, through which all the Russian gas intended for domestic consumption is sold to Ukraine.

Rosukrenergo is owned 50-50 by Russia's Gazprom and by two Ukrainian businessmen and makes money on commissions from the gas trade, though how that cash is shared out is unknown. Its last published accounts, for 2007, showed net income of $795 million on sales of $9.9 billion.