KIEV, Jan. 21 – A $2.3 billion natural gas dispute sparked on Wednesday between the government and a gas trader, two days after a 10-year gas deal had been reached between Ukraine and Russia.

At least 10 billion cubic meters of gas, apparently owned by RosUkrEnergo and kept in Ukrainian underground gas tanks, is now owned by the state gas company Naftogaz Ukrayiny, Prime Minister Yulia Tymoshenko said.

She said the gas was “purchased” at low price as part of the deal with Russia to ensure safe operation of the Ukrainian gas pipeline system moving gas to markets in the European Union.

But RosUkrEnergo, until recently Ukraine’s sole gas supplier, 50%-owned by Gazprom, on Wednesday disputed the transaction, claiming the gas was still owned by the trader.

“Naftogaz does not have any ownership of gas that belongs to the Swiss-based company,” RosUkrEnergo said in a statement Wednesday. “No decisions had been taken and no papers had been signed on the sale of gas owned by RosUkrEnergo in favor of Naftogaz.”

This gas is crucial for the operation of Ukraine’s gas transpiration system as Naftogaz plans to use it to run compressor plants that move Russian gas to the EU this year.

Naftogaz, which operates the country’s underground gas tanks, has been restricting RosUkrEnergo from using its gas since the start of the gas standoff between Ukraine and Russia on January 1.

This prompted RosUkrEnergo to file a lawsuit with an international court of arbitration in Stockholm in an attempt to recover the gas.

The development underscores aftereffects of the recent deal reached in Moscow and brokered by Tymoshenko and by her Russian counterpart Vladimir Putin over the weekend.

The deal established a formula for calculating a future price for natural gas that Ukraine will have to pay, scrapping a usual practice when annual price negotiations turn into a gas war between the two.

The deal was not yet shown to President Viktor Yushchenko, who had complained it may have hidden issues and may threaten Ukraine’s national security.

One of such potentially explosive issues may be the fate of the gas stored in the Ukrainian underground tanks that now, according to the deal, may be owned by Naftogaz.

Tymoshenko said Gazprom, which de-facto controlled RosUkrEnergo, has agreed to sell this gas to Naftogaz at $153 per 1,000 cubic meters, a bargain price compared with $360/1,000 cu m that Naftogaz otherwise will have to pay for gas in the first quarter.

Naftogaz paid $179.5/1,000 cu m for Russian gas in 2008.

The development apparently shows determination that the Kremlin-controlled Gazprom has decided to eliminate RosUkrEnergo as its key gas intermediary.

Tymoshenko has been crusading against RosUkrEnergo ever since taking office more than 12 months ago.

But the developments show Tymoshenko has finally persuaded Putin - who jointly with them President Leonid Kuchma had given green light for the creation of the gas trader in the summer of 2004 – to get rid of the company.

The move will hurt Dmytro Firtash, a billionaire and the biggest individual shareholder in RosUkrEnergo, who has been enjoying significant support from the opposition Regions Party.

Tymoshenko has earlier suggested that some officials at the office of President Viktor Yushchenko have been also backing the operation of RosUkrEnergo.

Yushchenko repeatedly denied the allegations.

But the lack of transparency in the gas sector, including the alleged transaction selling RosUkrEnergo’s gas to Naftogaz without the gas trader’s knowledge, suggest there may be more revelations ahead of the presidential election in Ukraine in January 2010.

Yuriy Boyko, a close friend of Firtash and one of those who had been directly involved in the creation of RosUkrEnergo, recently disclosed citing confidential sources that Tymoshenko has been lobbying in favor of another gas trader to replace RosUkrEnergo.

This new trader, Boyko alleged, would be granted the right to export Russian gas directly to Europe – not to Ukraine – and is backed by two powerful Ukrainian figures, Viktor Medvedchuk and Ihor Bakay.

Medvedchuk and Bakay denied the allegations and threatened to file a lawsuit against Boyko.

This is not the first time that Tymoshenko is alleged to have been working with Medvedchuk, a former chief of staff at the office of Kuchma.

Medvedchuk is thought to be the mastermind of massive manipulation and fraud at Ukraine’s presidential election in November 2004 seeking to prevent the election of his foe, Viktor Yushchenko. The fraud, however, triggered the Orange Revolution that had catapulted Yushchenko to the presidency.

Medvedchuk denied any wrongdoing. No charges have been ever filed against him.

Medvedchuk is known to have close personal relations with Russian President Dmitry Medvedev. Also, Putin is the godfather of Medvdchuk’s daughter. (tl/ez)