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Russia-Ukraine gas dispute

Price of gas for Ukraine may be $35 lower in Q4 than in Q3 — Gazprom CEO

Russia's Gazprom has no plans of piping gas to Ukraine’s storage facilities

© ITAR-TASS/Alexandr Ryumin

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MOSCOW, August 21. /TASS/. The price of gas for Ukraine may be $35 lower in the fourth quarter than in the third quarter, head of Russia’s gas giant Gazprom Alexei Miller told TASS on Friday.

"The contract price formula is pegged to the oil price. We see the trend for oil price decline and under the contract the price of gas in the fourth quarter may be lower $35 than in the third quarter," Miller said.

Russian Gazprom has no plans of piping gas to Ukraine’s storage facilities

Miller pointed out that Gazprom has no plans of piping gas to Ukraine’s underground gas storage facilities while the country has to pipe in 3.2 bln cubic meters in the remaining time.

"True, we see that Ukraine is piping gas in its underground gas storage facilities far slower now than last year. Back then by the start of gas offtake Naftogaz had accumulated 16.7 bln cubic meters of gas in its storages. Given the current rates it’s hardly possible to reach even this level. In the remaining time 3.2 bln cubic meters, or another 25% of the volume already piped in, need to be added," Miller said.

"Sufficient gas volumes in underground gas storage facilities is an obligatory condition for safe provision of Ukrainian consumers and gas transit to Europe in coming winter. Naftogaz is fully responsible for those issues. We take it as a premise and will not pipe in our gas to Ukrainian storage facilities," Gazprom CEO added.

Miller also said reduction of gas consumption in Ukraine does not guarantee safe transit due to small volumes of gas pumped into underground gas storage facilities. "Economic decline continues in Ukraine, but reduction of consumption at an annual rate does not guarantee safe transit if there are small volumes of gas at underground gas storage facilities. Weather affects peak consumption, not economy. Last year, it was warm, and 16.7 bln of cubic meters in storages was enough. However, Ukraine cannot hope for a warm winter every year and should be ready for a cold winter," he said.

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Gazprom Russia-Ukraine Gas Dispute

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