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Russia-Ukraine gas dispute

Gazprom to limit supplies if Kiev illegally takes part of transit gas

The contract states that if Ukraine starts taking gas unsanctionedly, Gazprom has the right to limit supplies, according to the company's head

© Valery Sharifulin/TASS

TOKYO, December 16. /TASS/. Gazprom has the right to limit supplies if Ukraine illegally takes part of transit gas, Gazprom's head Alexey Miller told reporters on Friday.

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"The 2009 contract very clearly states that if Ukraine starts taking gas unsanctionedly, Gazprom has the right to limit supplies in the amount that was unsanctionedly taken. Gazprom may start limiting supplies unproportionately. A possibility is also envisaged in case of single unsanctioned taking for Gazprom to cease supplies altogether," he noted.

"Ukraine now has problems with gas volumes in underground storages. They pumped the lowest volume ever there, started to take gas earlier that usual. The main thing is that we know how much gas Ukraine will need if severe cold settles," Miller said adding that "Ukraine has never managed without Russian gas in cold temperatures."

In such conditions, refusal to buy Russian gas "highlights those risks that exist in tranist through Ukrainian territory," he noted.

Miller says Ukraine may take transit gas to pay for the unlawful fine since has is the only property of Gazprom in Ukraine.

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Gazprom explores opportunities for further legal protection of rights in Ukraine

He described the Kiev court's decision on fining Gazprom as "very strange," noting that the verdict envisages forced collection of a fine.

"This means that since Gazprom has not assets on Ukrainian territory, Gazprom does not work on Ukrainian territory, and our gas is (in transit), the fine may be forcibly collected only by taking our gas on Ukrainian territory in the amount of the fine," Miller said.

The average price for gas supplied to Europe is expected to be higher in the 1st quarter of 2017 than in the 4th quarter of 2016, he went on.

Miller said that gas prices have lately been higher at spot markets in relation to oil, and there is a growing tendency for the latter in this regard.

"We already see dymanic of prices for oil and oil products in the 4th quarter and, consequently, their (influence) on gas contracts. We can already say for sure that the average price of supplying gas to the European market will be higher in the 1st quarter (of 2017) than in the 4th quarter (of 2016)," Miller noted.

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Oil & Gas Russia-Ukraine Gas Dispute

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