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Gazprom agrees with Ukraine's Supreme Court that rules Moscow-Kiev gas contract undisputed

June 24, 2014, 17:22 UTC+3 VIENNA
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VIENNA, June 24. /ITAR-TASS/. Russian state-controlled energy giant Gazprom’s CEO Alexei Miller agreed on Tuesday with the ruling of Ukraine’s Supreme Court that actually said the gas contract between Moscow and Kiev is undisputed.

“The contract signed in 2009 in this case is undisputed,” Miller told journalists.

“I think this once again emphasizes that for five years, the Ukrainian side fulfilled all terms of the contract, paid for gas supplies as part of this contract, and there were no serious problems until recently,” he said.

The 2009 gas contract between Russia and Ukraine was signed by then-Ukrainian Prime Minister Yulia Tymoshenko and then-Russian Prime Minister Vladimir Putin.

In 2011, Tymoshenko was jailed for abuse of power over the 2009 gas deal with Russia that the then Ukrainian authorities said was unprofitable for the country.

After a coup in Ukraine in February 2014 that saw then-President Viktor Yanukovych leave Ukraine for security reasons, the Verkhovna Rada (parliament) ruled to release Tymoshenko from prison.

Russian state-controlled energy giant Gazprom on June 16 switched Ukraine’s oil and gas company Naftogaz to prepayment for gas supplies because Kiev failed to pay part of its gas debt by the deadline of 10:00 Moscow Time on June 16.

Gas supplies to Ukraine were halted, but transit volumes were reportedly passing via Ukraine to Europe in line with the schedule.

Gazprom said June 16 that Naftogaz’s past due debt for supplied Russian gas totals $4.458 billion: $1.451 billion for November-December 2013 and $3.007 billion for April-May 2014.

Russia recently substantially raised the gas price for Ukraine to $485.5 per 1,000 cubic meters, but Ukraine has insisted the price should be lowered to that of this year’s first quarter ($268.5 per 1,000 cu m).

Moscow raised the price for Kiev to $385.5 per 1,000 cu m in the second quarter of 2014 because 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.

Another raise to $485.5 per 1,000 cu m was due to the cancellation of the Kharkiv Accords with Ukraine, which had been 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 accords also envisioned a $100 discount.

Crimea refused to recognize the legitimacy of authorities who were propelled to power in Ukraine during the February 2014 coup. The peninsula held a referendum on March 16 and overwhelmingly voted to reunify with Russia, seceding from Ukraine after some 60 years as part of it. Russian President Vladimir Putin signed the accession agreement on March 18.

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