JKX 2006

Gas prices in Ukraine have been going up gradually for several years - see JKX annual reports.

Gas prices to domestic customers are held down at quite a low level (about $50), but those for industrial users are much higher, about $100 or so. This results in massive amount of waste so the Ukranian government (viz Yuschenko)itself are anxious for prices to achieve a gradual and politically appropriate higher level.

Part of the spat in the summer between Yuschenko and Tymoshenko was that she wanted to keep petrol prices artificially low (Russia cut supplies temporarily at that time as well) - he slapped her down and then sacked her, and allowed petrol prices to be fixed by the market. Ukraine has also been granted EU market economy status.

Part of the problem with domestic consumption is that everyone lives in tower blocks with a central boiler - no incentive to economise.

But things seem to be getting serious more quickly than even I anticipated with the Russkies accusing Ukraine of nicking gas already:-



and



I did anticipate this in my post 3684 on the old board, but not that it would happen quite so quickly!!!!



As for Ukraine getting gas from Turkmenistan - all well in theory BUT and its a BIG but - all the pipelines to Ukraine run through Russia from Turkmenistan, and the Russkies have already bought up most of the gas



I guess the Russians could either, cut back supplies further to Europe to compensate for what Ukraine is nicking or pinch supplies to compensate from the Turkmenistan - Ukraine pipeline as it passes through Russia.

Whatever happens Putin/Gazprom are determined to see Ukraine brought to its knees and a pro Russian government elected in March. This jackboot type diplomacy is the only thing they know how to do well. Incidentally, speaking to a Russian over lunch today, she said most Russians approved of Putin as he was a strong leader, who made Russia strong.

One way or another gas prices are going up in Ukraine and JKX will benefit, pity the poor Ukrainians. Other Ukraine gas plays are RPT and CDL - both riskier than JKX.

As for a zinc play - try GFM.