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Russia's support for Ukraine will not be endless — Russian PM

January 20, 2015, 15:37 UTC+3
Gazprom has demanded repayment of $2.44 billion gas debt from Ukraine
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Russian PM Dmitry Medvedev (center), Gazprom CEO Alexey Miller (left) and Energy Minister Alexander Novak (right)

Russian PM Dmitry Medvedev (center), Gazprom CEO Alexey Miller (left) and Energy Minister Alexander Novak (right)

© Dmitry Astakhov/Russian government press service/TASS

GORKI (MOSCOW REGION). January 20. /TASS/ Russia’s support for Ukraine will not be endless, that fact has to be considered, Russia's Prime Minister Dmitry Medvedev said on Tuesday.

"We have to understand that it is the good will of our country. And that kind of support cannot go on forever. Sooner or later, it will run out, everyone has to be aware of that," Medvedev said at the cabinet meeting. The cabinet meeting was dedicated solely to the gas relations between Ukraine and Russia.

"We really believe that there are people who are close to us, who live on the territory of Ukraine. Russia's President has a position on this matter and we use it as a guideline," reminded Medvedev. "We will continue to work on this matter in the future," he added.

Dmitry Medvedev said Russia will honour its commitments on gas cooperation with Ukraine only in case Kiev settles its debt for gas supplies.

“We assume that those agreements [on gas with Ukraine] will be normally honoured only if Ukraine settles its current gas debt,” Medvedev said.

The prime minister told Gazprom head Miller to strive for the settlement of Kiev’s debt, which now totals $2.44 billion. Miller told the prime minister the Russian gas giant has sent a letter to the Ukrainian national energy company Naftogaz, notifying it of the need to repay $2.44 billion gas debt.

“Gazprom has today sent a letter to Naftogaz, saying the outstanding debt equals $2.196 billion [for the gas supplied to Ukraine] plus penalties charged on overdue payments in strict accordance with the terms of the contract,” Miller said, adding Naftogaz’s overall gas debt equaled $2.44 billion.

Russia has recently taken a number of steps “to support the weakening and troubled Ukraine’s economy,” Medvedev added. However, he warned that this support is not going to be everlasting.

“Everyone should realize that it is still our country’s good will, and this kind of support can’t last forever,” he said. “Everyone should realize that it will end up sooner or later,” the prime minister said.

Gas price discount is one of possible ways of supporting Ukraine. However, Medvedev said, it will terminate on April 1.

“On April 1, the period of [gas price discount] duration terminates. After that, all existing contracts will remain valid and the price [of gas] will be based on the framework gas agreements between Russia and Ukraine,” Medvedev said.

“Let’s wait and see, we’re open to discussions on various ways of cooperation,” he said.

Infographics Gas agreement signed by Russia, Ukraine and the EU Gas agreement signed by Russia, Ukraine and the EU
Gas agreement signed by Russia, Ukraine and the EU On October 31 Russia, Ukraine and the EU signed an agreement on gas supplies. Infographics by TASS

The prime minister said that currently Kiev is actively searching for funds to support its economy and also, as Moscow expects, to settle the remaining debts. “Since the sustainable financing of the economy is hardly possible without that. One should pay off debts,” Medvedev added.

In late December, Russian Energy Minister Alexander Novak said Russia was ready to offer Ukraine a discount under the natural gas supply contract in spring 2015.

The discount offered by Russia’s natural gas monopoly Gazprom after trilateral negotiations in Brussels on October 30 sets the gas price for Ukraine in the fourth quarter of 2014 at $378 for 1,000 cubic meters, and in the first quarter of 2015 - at $365 for 1,000 cubic meters.

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