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Russia ready to give gas discount to Ukraine if debt partially paid off - energy minister

May 16, 2014, 16:33 UTC+3 MOSCOW

State company Naftogaz of Ukraine’s purchases of Russian gas over 5 months of 2014 will have equaled imports for the entire 2013

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© ITAR-TASS/Vitaly Grabar

MOSCOW, May 16. /ITAR-TASS/. Russia is ready to give a discount for natural gas to Ukraine should Kiev pay off its debt to the tune of $2.237 billion, accumulated over the period until April 1, Russian Energy Minister Alexander Novak told journalists Friday.

The debt of Ukrainian state energy company Naftogaz for the first quarter of 2014 totaled $1.6 billion. Besides, Ukraine remains in debt for 2013, owing some $637 million.

Ukrainian state energy company Naftogaz’s debt to Moscow currently totals some $3.508 billion with the gas price standing at $485.5 per 1,000 cubic meter.

Moscow recently substantially raised the price for gas supplied to Ukraine from the figure of $268.5 per 1,000 cubic meters agreed last year when an association agreement with the European Union was shelved in November 2013.

In the second quarter of 2014, the price for Russian gas for Ukraine was set at $385.5 per 1,000 cu m. Russian state energy giant Gazprom said earlier that the price rose from $268.5 due to the return to earlier contract agreements, as Ukraine failed to fulfill its commitments under an additional agreement concluded in December 2013, which obliged the country to pay for supplied volumes of Russian gas in time.

On April 2, Russian President Vladimir Putin signed a law on denunciation of the Kharkiv Accords with Ukraine, which were struck in 2010 and stipulated that Russia’s lease of naval facilities in Crimea (then part of Ukraine) would be extended by 25 years beyond 2017 - until 2042.

The Kharkiv deals envisioned a discount of $100 per 1,000 cubic meter on Russian gas for Kiev. Now that the accords have been denounced due to Crimea’s accession to the Russian Federation, the discount is no longer applied, raising the gas price by another $100 to $485.5 per 1,000 cubic meter.

Ukraine saw a coup in February, with new people brought to power amid riots as President Viktor Yanukovych had to leave the country citing security concerns. Crimea refused to recognize the new Kiev authorities and seceded from Ukraine to join Russia after a referendum in March.


Naftogaz purchases

State company Naftogaz of Ukraine’s purchases of Russian gas over 5 months of 2014 will have equaled imports for the entire 2013, shows Russian monopoly Gazprom’s data on gas exports to Ukraine.

In the first four months of 2014, Nazftogaz imported 2.45 billion cubic metres, 1.64 billion cubic metres, 1.86 billion cubic metres and 2.7 billion cubic metres respectively. Over 12 days of May, export amounted to 1.35 billion cubic metres, which means that by the end of May, Naftogaz will have probably imported a total of about 11 billion cubic metres since the year-start.

Last year, the company bought 12.9 billion cubic metres of Russian gas. Total gas imports were about 20 billion cubic metres, with more than 40 billion cubic metres consumed within the country.

Naftogaz has not yet paid for 2014 supplies. Gas debt for January - March imports ($268.5 for 1,000 cubic metres) totals $1.6 billion. Gas supplied in April at $485.5 for 1,000 cubic metres costs $1.3 billion; the debt for gas supplied so far in May is $655 million.

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