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Russia extends winter package of gas prices for Ukraine

Russian President Vladimir Putin has supported the proposal of setting the gas price for Ukraine at $250 per 1,000 cubic meters, an almost 25% decrease from the first quarter of 2015

MOSCOW, April 1. /TASS/. Russia is again offering Ukraine a $100 discount per 1,000 cubic meters of gas, extending the so-called winter package into the second quarter.

Russian President Vladimir Putin has supported this proposal. The gas price for Ukraine with the discount from April 1 will be $250 per 1,000 cubic meters, an almost 25% decrease from the first quarter of 2015.

At the meeting with the president late on Tuesday, Russian Prime Minister Dmitry Medvedev said that the government had decided to meet the respective demand of the Ukrainian side and Gazprom.

In turn, Kiev has to strictly comply with all the conditions, and namely the payment of the remaining debt to Gazprom which including penalties is $2.477 billion.

Ukraine has secured the discount upon the request of the European Commission.

The winter package of Russian natural gas supplies to Ukraine was agreed between Russia and Ukraine with the EU’s mediation in Brussels in October 2014. Ukraine paid its outstanding debt of $3.1 billion for previous supplies.

One of the key issues now is the return of a take-or-pay term in the second quarter.

Russia insists on returning to the take-or-pay term despite the extension of the winter package conditions, a source close to the negotiations told TASS on Tuesday.

Gas supplies to Ukraine in the second quarter should be implemented in accordance with the currently effective contract between Gazprom and Ukraine’s Naftogaz, which stipulates the take-or-pay condition, the source said.

On March 20, after the trilateral gas talks between Russia, Ukraine and the European Union Russia’s Energy Minister Alexander Novak said that the take-or-pay regime would be resumed for Ukraine from April 1 as Naftogaz and Gazprom were currently considering the issue in the arbitration court.

According to Ukraine’s gas pipeline operator Ukrtransgaz, Ukraine has recently increased imports of Russian gas by almost 50% On March 29, Ukraine’s import of Russian gas totaled 17.15 million cubic meters, though the average gas offtake was around 10 million cubic meters in March.

The venue and date of the new round of trilateral talks on gas have not been yet announced. The talks are to discuss the injection of 12-15 billion cubic meters of the Russian natural gas to Ukraine’s underground storages, guarantees of the reliable transit of the Russian gas to Europe via Ukraine and financial assistance of the European Commission to Ukraine for gas procurements.