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Putin: Gazprom offers Ukraine same gas contract terms as to Yanukovych

June 11, 2014, 16:09 UTC+3
Kiev's demands for lower gas price in exchange for consent to pay deliberately stalemates the situation, the Russian president noted
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Vladimir Putin

Vladimir Putin

© ITAR-TASS/Alexei Druzhinin

MOSCOW, June 11. /ITAR-TASS/. Gazprom has offered Ukraine the same gas contract terms as to Yanukovych, including the discount conditions, Russian President Vladimir Putin has said on Wednesday.

“Gazprom has offered the Ukrainian partners the same terms that the government of Viktor Yanukovych had: a discount for the contract price amounting to $100, and the final price of $385 per thousand cubic meters,” Putin stated at a consultation meeting with the members of the government.

According to Putin, Kiev's demands for lower gas price in exchange for consent to pay deliberately stalemates the situation.

Putin said “Ukrainian partners are kind of not satisfied with these discounts, they want more, but it is not very much clear on what grounds”.

The Russian president said Russia is holding gas talks in an open and transparent way.

“We believe our proposals are more than partner-like, aimed at supporting the Ukrainian economy at a difficult time for it. But if our proposals are rejected, it means we will go over to a totally different stage,” Putin said.

“It’s not our choice, we do not want this,” he said.

The president said that some of Ukraine’s neighbors, including Poland, were getting gas at a higher price, “while the price parameter remains the same, namely, the reduction of the gas export customs tax”.

Putin has also instructed the government to develop an option of freezing the terms of gas supplies to Ukraine for a certain period.

“I would like to ask the government and the head of the cabinet to think on how it could be possible at the level of the government of the Russian Federation or upon agreement with the government of Ukraine freeze these terms and make them absolutely guaranteed and free from changes for a certain period,” Putin told the ministers.

He noted that the Ukrainian partners are concerned that the discount offered to them may be unilaterally canceled.

“We have never done so. We have always demonstrated that our agreements are reliable to the maximum,” Putin stressed.

 

Ukraine still insisting on contract change

Ukraine has rejected Russia’s discount of $100 per 1,000 cubic meters of gas, Ukrainian parliament-appointed Prime Minister Arseniy Yatsenyuk has said earlier.

We want the contract be changed,” Yatsenyuk said on Wednesday.

He added that he spoke to Ukrainian parliament-appointed Energy and Coal Minister Yuriy Prodan, who is currently in Brussels.

“Russia has shifted the prepayment term once again, as the supplies’ cut off. Russia proposed to reduce the gas price. Still, our stance was and now consists in changing the contract, and not agreeing to a decision made by the Russian government regarding the change of gas price,” Yatsenyuk said adding that the Russian government could increase the price later.

“We are holding short: we change the contract and set a market price. We have paid the market price of $286. We are ready to pay all debts according to this price, and other proposals are unacceptable,” the Ukrainian prime minister said.

“Once again I urge Russia to sign the agreement to avoid court proceedings,” he added.

Earlier, Russia has postponed the introduction of prepayment mode for gas supplies to Ukraine until 10:00 Moscow time (06:00 GMT) June 16.

 

What happened to the gas price for Ukraine

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, 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 cu m 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 cu m.

Ukraine saw a coup in February 2014, with new people brought to power amid riots as then-President Viktor Yanukovych had to leave the country citing security concerns. Crimea refused to recognize the coup-imposed authorities and seceded from Ukraine to join Russia after a referendum in March.

Despite Moscow’s repeated statements that the Crimean referendum on secession was in line with the international law and the UN Charter and in conformity with the precedent set by Kosovo’s secession from Serbia in 2008, the West and Kiev have refused to recognize the legality of Crimea’s reunification with Russia.

Ukraine hopes to annually obtain about 10 billion cubic meters of gas through gas reverse supply schemes from Slovakia, Poland and Hungary. In this way, Ukraine can only cover a third of its Russian gas imports due to supplies from Europe.

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