Currency converter
News Feed
News Search Topics
Use filter
You can filter your feed,
by choosing only interesting

Naftogaz Ukrainy is unlikely to pay over one billion dollars to Gazprom before Nov 8

November 07, 2013, 1:43 UTC+3
Naftogaz claims the key problem with the settlements is the complicated situation with payments for the gas consumed inside Ukraine
Material has 1 page


MOSCOW, November 7 (Itar-Tass) - Naftogaz Ukrainy before end of the banking day on Thursday /05:00 pm Moscow time/ should transfer to Gazprom over one billion dollars for the Russian natural gas supplied in October - in compliance with the documents applied to the contract on gas supplies for 2009-2019.

Itar-Tass has information that Gazprom supplied to Ukraine 3.2 billion cubic metres of natural gas.

The chance Naftogaz will be able to find the necessary one billion dollars to pay for the supplies made in October is not high, as the Ukrainian counterparts still owe the payment for the gas received in August. As of Thursday, Naftogaz has covered only twelve percent of the August supplies’ invoice for 882 million dollars.

Naftogaz claims the key problem with the settlements is the complicated situation with payments for the gas consumed inside Ukraine. The heat energy sector only owes about 17 billion hryvnias /2.125 billion dollars/. The company says the state /Ukraine’s government/ has not settled the difference between prices for imported gas and sell prices - 10.7 billion hryvnias /1.338 billion dollars/.

Deputy Minister of the country’s energy and coal industries Eduard Stavitsky says Kiev has been considering various options of settling the debt, one of them being the option to collect overdue payments for gas consumed inside the country.

However, Gazprom said already, it is ready to begin working with Ukrainian counterparts on the basis of prepayments. “We are extremely concerned about the situation on Ukraine’s non-payment for Russian gas supplies," Gazprom’s CEO Alexei Miller said. "An additional agreement to the contract has been signed that allowed to put off payment for August supplies in the amount of 882 million dollars until October 1. But October is coming to an end and the bills have not been paid yet. This is a very serious situation as under the contract, breach of payment terms entails an advance payment system,” he said, adding that the issue should be resolved quickly.

Russia’s Prime Minister Dmitry Medvedev shares concerns expressed by Gazprom. He said earlier “the government monitors the situation, but this is first of all a matter between two businesses /Naftogaz Ukrainy and Gazprom/, and they should settle the issue.”

Gazprom had met the Ukrainian side halfway several times, Miller said. To enable Ukrainian national oil and gas company Naftogaz to make prompt payments in the entire amount for supplied gas, the Russian holding had made an advance payment for gas transit through Ukraine until January 2015. Gazprom had also granted the company a considerable discount - 5 billion cubic metres of gas were sold to Ukraine at 269 dollars for 1,000 cubic metres - a discount of more than 0.5 million dollars.

Naftogaz may once again face fines for unused contracted gas. Earlier, Itar-Tass referred to a research note from the National Energy Security Fund (NESF) warned that if Ukraine did not take the entire contracted amount of gas in 2013, it might face a penalty of almost $10 billion. Ukraine was sure to violate "take or pay" terms again and would receive another invoice from Gazprom in early 2014, NEFS Deputy Director Aleksey Grivach said.

“By our estimates, Naftogaz will hardly be able to buy more than 17-18 cubic metres this year, while it is obliged to buy 41.6 billion. Given the average contract price of 410 dollars for 1,000 cubic metres, unused gas will cost Ukraine about ten billion dollars,” he calculated. The fine for unused gas over 2012 was exactly the same sum.

Naftogaz’ debts are growing, and the Ukrainian counterparts are not likely to gain loans from Russia. Earlier, Ukrainian state-run companies were credited by Gazprombank and by Gazprom, but the latest credit tranche to pump the gas into Ukraine’s gas transporting system for the smooth transit of the Russian gas was transferred to the company of Ukraine’s Dmitry Firtash. So that his company could have additional gas in store, Gazprom made a discount to the businessman’s Ostchem Holding. Firtash also received loans of 750 dollars from several Russian banks for buying the gas.

Director of the Institute for National Energy Sergei Pravosudov says Naftogaz is on the way to bankruptcy. He says the so-called “paper” reverse of gas from Europe involves private gas companies: Ostchem of Firtash, VETEK of Sergei Kurchenko and DTEK of Rinat Akhmetov. The share of Naftogaz in import of gas lowered over nine months of 2012 from 79 to 44 percent, NEFS research reads. Pravosudov stresses Gazprom has begun working on import of the Russian gas with Firtash’s companies. Besides, Ukrainian private companies are grasping from Naftogaz most payable markets - the industry, thus, it is very doubtful the Ukrainian state-run company would be able to find new sources of additional revenues to pay for the debts. “Bankruptcy of Naftogaz is the only way to settle the problem with the debts,” the Institute’s director said. “In that case, Ukraine would be able to begin afresh its new gas history by dividing Naftogaz’ assets between new players - privately owned gas companies,” the expert added.

Ukraine’s gas transportation system consists of 72 compressor stations, 110 production shops and 1,451 gas distribution stations. The overall length of gas pipelines operated by Naftogaz Ukrainy is 38,600 kilometres, including 22,200 kilometres of trunk pipelines and 16,400 kilometres of extensions.

Показать еще
In other media