KIEV, July 9 – Ukraine’s national oil and gas company, Naftogaz Ukrayiny, warned Monday that European natural gas supplies may be at risk of disruption if Ukraine tries to remove RosUkrEnergo as its main gas supplier.

President Viktor Yushchenko said last week Ukraine should try to establish more transparent gas trading with Russia, a move that may apparently seek to remove RosUkrEnergo, a controversial gas trader.

But Naftogaz issued a statement suggesting that “canceling the existing scheme of gas supplies may lead to gas shortages on domestic market” and trigger disruption of gas supplies to the Europe.

“The worst consequence of such development may be restriction of supplies to the European Union during the peak demand in the winter,” Naftogaz said.

Naftogaz is run by a top manager loyal to Energy and Fuel Minister Yuriy Boyko.

The development comes days after evidence emerged that Boyko apparently has strong personal relations with Dmytro Firtash, a key shareholder of RosUkrEnergo.

Firtash at least once over the past two years has authorized Boyko “to manage and dispose of all assets” that he had owned, according to a letter of attorney obtained by Ukrayinska Pravda newspaper. Firtash’s companies, including a firm that owns 45% of RosUkrEnergo, reported $4.6 billion in annual revenues as of Dec. 31, 2006.

The letter underscores strong personal relationship between Boyko as Firtash.

Boyko has been always defending RosUkrEnergo, which supplies 100% of Ukraine’s natural gas imports. But the Naftogaz statement, which cites the threat of EU gas supply disruptions, is apparently aimed at discouraging Yushchenko against any gas sector shake-up.

Russia supplies a third of EU’s gas needs. Most of these supplies, up to 80%, come via pipelines on the Ukrainian territory.

EU gas supplies have been already disrupted between Jan. 1, 2006, and Jan. 4, 2006, following dispute between Russia and Ukraine over natural gas prices.

RosUkrEnergo, registered in Switzerland, was created in the summer of 2004 as an intermediary that has been supplying gas from Central Asia via Russia to Ukraine.

RosUkrEnergo was apparently owned by undisclosed individuals, but Gazprom had later purchased 50% stake in the company. Firtash later appeared to be the biggest individual shareholder in RosUkrEnergo, according to an announcement in April 2006.

RosUkrEnergo does not own gas producing assets and is buying Central Asian gas from Gazprom and reselling it to consumers in Ukraine. Analysts said that Ukraine should have had a supply contract with Gazprom, the main producer of natural gas in Russia.

Naftogaz also warned that removing RosUkrEnergo will also lead to doubling the price of natural gas to be paid by Ukraine.

RosUkrEnergo currently sells gas to Ukraine at $130 per 1,000 cubic meter, while Gazprom said it would have to charge $230 per 1,000 cubic meters.

Yushchenko said that he will meet Russian President Vladimir Putin in August to try to agree on a formula to figure out future prices of natural gas that would be good for both, Ukraine and Russia.

“I have put down the formula at a meeting with Putin. It depends on a change of prices for other alternative energy, such as uranium or coal,” Yushchenko said in an interview with Izvestia, a Russian daily.

“Once we agree on rules for defining the price, we will be able to forecast the situation for a year ahead,” Yushchenko said. (tl/ez)