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Russia-Ukraine gas dispute

Naftogaz of Ukraine refuses to recognise debt under take-or-pay contract

Naftogaz of Ukraine’s overall debt to Gazprom for taking less gas than required under the take-or-pay contract is about 18.5 billion U.S. dollars

KIEV, May 01, /ITAR-TASS/. Naftogaz of Ukraine on Thursday, May 1, refused to recognise the debt of 11.4 billion U.S. dollars charged by Gazprom for taking less gas than required by the contract between the two companies.

“Gazprom’s demand contains a reference to the so-called take-or-pay clause which has not been a market practice for a long time the way the Russian gas monopoly insists. In addition, the contract between Naftogaz of Ukraine and Gazprom does not contain a mechanism for enforcing this clause,” the Naftogaz of Ukraine press service said.

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Turchinov orders Naftogaz to secure Russian gas supplies at previous price

Kiev’s debt has reached 2.2 billion U.S. dollars since January 2014 and will reach 3.5 billion U.S. dollars by the middle of May when the next payment is due.

Naftogaz of Ukraine’s overall debt to Gazprom for taking less gas than required under the take-or-pay contract is about 18.5 billion U.S. dollars.

Gazprom charged Naftogaz of Ukraine 11.388 billion U.S. dollars for taking less gas than had been contracted in 2013: the Ukrainian company too only 12.9 billion of the required 41.6 billion cubic metres.

Ukraine is ready to pay the price of 268 U.S. dollars per 1,000 cubic metres of Russian gas, parliament-appointed Prime Minister Arseny Yatsenyuk said.

This is 45% below the established price of gas. If Moscow disagrees, Kiev will be prepared to contest its debt in court, he said.

Yatsenyuk told reporters that a “note” had been sent to Russia’s Gazprom, which “states the price”. If Gazprom accepts the proposed terms, Ukraine will pay the gas debt of 2.2 billion U.S. dollars immediately. If no solution is found within 30 days, the dispute will be taken to court.

“We have come to agreement on a trilateral meeting between Ukraine, the EU and Russia to settle the gas conflict. But I would like to recall that Ukraine has sent a pre-arbitration claim to Gazprom. If the positions are not reconciled and Ukraine’s demands are not met within 29 days, we will meet in Stockholm’s international court of arbitration,” he said.

“The government invites Gazprom to meet on neutral ground in London and discuss all issues. We will defend the interests of Ukraine using all lawful methods and the best lawful method is the court in Stockholm,” Yatsenyuk said.

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