Konstantin Zaytev, Vice Chairman of Energy Committee of State Duma

– Our relations with neighbors must be of strategic nature, must be benevolent and oriented towards future

NNEGC Energoatom (Ukraine) has suggested revising the terms of its nuclear fuel supply contract with TVEL OJSC (part of Atomenergoprom OJSC). Vice President of Energoatom Olga Kravets has admitted that the company is failing to timely pay for the supplied fuel. “We are sure that the Ukrainian NPPs will be stably supplied with fuel despite this difficulties.”

Recently many Russian and foreign mass media have been actively discussing Russia’s long-term strategic relations with its foreign partners. In one of his last interviews President of Russia Dmitry Medvedev said that “some types of our long-term strategic ties cannot be calculated. How can one overcharge the friendship or history of our people? One can’t calculate this. Our relations with our neighbors must be of strategic nature, must be benevolent and oriented towards future.”

This very nature of relations helps Russia to reach agreements with its traditional foreign partners on mutually beneficial commercial terms and even to provide them with certain preferences.

It is obvious that NNEGC Energoatom and TVEL OJSC think likewise. Their relations, started in 1996, are a bright example of long-term, mutually beneficial and depoliticized partnership on stable and guaranteed supply of nuclear fuel to Ukrainian nuclear power plants.

During their Apr meeting Prime Minister of Russia Vladimir Putin and Prime Minister of Ukraine Yulia Timoshenko instructed the companies to sign a long-term contract by July 15 2009. The contract has not yet been signed even though TVEL and Energoatom have agreed on all commercial terms. Mass media report that TVEL was ready to sign the contract as early as July 8–10. Energoatom has submitted all necessary documents to the Ukrainian Cabinet. But it seems that the Ukrainian authorities do not want to enjoy exclusive preferences for their nuclear industry. They in TVEL say that the Ukrainian Government is politicizing this question and is the only one to blame for the delay in signing the contract.

During her recent interview Vice President of NNEGC Energoatom Olga Kravest pointed out the importance of long-term relations in the field of peaceful use of nuclear energy: “The Russian producer of nuclear fuel is our strategic partner.” Kravets confirmed that the issue was being politicized: “Our companies have no problems. We are in constant dialogue and are always ready to meet each other half-way. Particularly, TVEL understands the reasons why we are delaying the payments for its fuel and is ready for compromise.”

However, in such a situation TVEL must be very careful in reacting to Energoatom’s requests. It must understand that the latter is being strongly influenced by the Ukrainian authorities and that it is exactly the Ukrainian authorities whom TVEL must refer its claims for guaranteed payments. Recently we have been receiving quite worrying reports that Energoatom keeps applying to courts for bankruptcy, wants to buy currency but cannot do it, is facing force majeure situations and is struggling from crediting moratoriums.

It is very hard to work in such an extremely unpredictable situation. In fact, presently, the Russian and Ukrainian companies are cooperating despite the political will of the Ukrainian authorities. So, experts strongly recommend TVEL to claim clear and public political guarantees before making any decisions on this matter.