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Gazprom may use its right to switch Ukraine over to prepayment for May deliveries of gas

April 16, 2014, 4:16 UTC+3 MOSCOW
Naftogaz had failed to pay $500 million for the March supply of Russia's gas
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© ITAR-TASS/Sergey Davydkov

MOSCOW, April 16. /ITAR-TASS/. On Wednesday, Gazprom may avail itself of its right to switch the Naftogaz Ukraine over to prepayment for May deliveries of gas. This follows from the contract signed by Gazprom and Naftogaz on January 19, 2009.

"If payment is not made by the 7th of a month following the month for delivery, the seller has a right to switch deliveries over to prepayment. Not later than the16th of a month preceding the month of delivery, Gazprom makes out a preliminary bill which the buyer should foot in full prior to the beginning of the month for delivery. If the buyer fails to fulfil the obligation or does that improperly, the seller has a right partially or fully to terminate the fulfilment of its obligations," says Article 5 of the contract dated January 19, 2009.

Itar-Tass reported earlier that Naftogaz had failed to pay $500 million for the March supply of Russia's gas. Ukraine's aggregate debt as of the beginning of April is up to $2.2 billion.

On Tuesday, RWE and Nafrogaz Ukrainy announced a reverse supply of gas to Ukraine via Poland. Vladimir Chizhov, Russia's Permanent Representativeve at the European Union, when referring to a technological possibility of reverse supply, pointed out, "speaking in plain, not technological language, gas cannot be pumped in opposite directions via one and the same pipe". "Therefore, an attempt at arranging a reverse supply, be it from Slovakia or from Hungary, to Ukraine, that would mean that the supply of gas from east to west (to the European Union) will diminish," he said. Neither the RWE nor Naftogaz Ukrainy do not disclose a diagram for reverse supply of gas.

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