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Russia-Ukraine gas dispute

Russia’s Gazrpom should demand advanced payments from Ukraine’s Naftogaz — official

Russian deputy energy minister said Gazprom pays custom duties in foreign gas supplies, therefore, company should transfer Ukrainian partner on advanced payment, according to the legislation

© EPA/SERGEI ILNITSKY

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MOSCOW, May 12. /ITAR-TASS/. Russian gas giant Gazprom should transfer the Ukrainian national oil and gas company Naftogaz of Ukraine to the system of advanced payment, Russian Deputy Energy Minister Anatoly Yanovsky told a news conference on Monday.

Yanovsky says Gazprom pays custom duties in foreign gas supplies, therefore, the company should transfer the Ukrainian partner on advanced payment, according to the Russian legislation.

A bill for advanced payment in June should be produced before May 16 and should be paid by Naftogaz until the end of a month preceding a month of delivery.

For two months Ukraine has not made payments for delivered Russian gas. Naftogaz’s debt has already reached $3.5 billion.

According to the contract between Gazprom and Naftogaz Ukrainy signed on January 19, 2009, “If the payment is not made by the 7th day of a month following a month of delivery the seller can shift supplies on the following procedure of settlements. No later than on the 16th day of a month preceding a month of delivery the seller (Gazprom) produces a preliminary bill for the month which the buyer should pay fully before the start of a month of delivery.” In current situation and according to Article 5 Clause 3 of the contract “if the buyer did not fulfil or fulfilled improperly all liabilities the seller can stop executing its liabilities partially or fully.”

So, before May 16 Gazprom will produce a bill for June gas supplies to Naftogaz which should pay it before the end of May. If the bill is not paid, sanctions on the contract restricting gas supplies to Ukraine may be imposed in this case.

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Oil & Gas Naftogaz Gazprom Russia-Ukraine Gas Dispute

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