Ukraine hopes to cover over half of gas needs through EU reverse — energy minister

Business & Economy August 19, 2014, 20:38

“With account for Slovakia, Poland and Hungary, we can cover over 50% of our imported gas needs,” he adds

KIEV, August 19. /ITAR-TASS/. Ukraine hopes to receive more than half of imported natural gas it needs through reverse supplies from the European Union, Ukrainian parliament-appointed Energy and Coal Industry Minister Yuriy Prodan said Tuesday.

“With account for Slovakia, Poland and Hungary, we can cover over 50% of our imported gas needs,” the Ukrainian Energy Ministry quoted Prodan as saying.

He said Ukraine may annually obtain 8-10 billion cubic meters (bcm) of gas via Slovakia. In all, such supplies may amount up to 16 bcm each year via the territory of the three countries.

Ukraine hopes to start partial reverse of natural gas via Slovakia (the Vojany-Uzhgorod pipeline) from September 2014. Test deliveries of fuel through that pipe currently continue, with daily volumes reaching up to 2 million cubic meters.

Russian energy giant Gazprom on June 16 switched Ukrainian national oil and gas company Naftogaz to prepayment for gas supplies because Kiev failed to pay part of its gas debt by the deadline of 10:00 Moscow Time on June 16. Gas supplies to Ukraine were halted, but transit volumes were reportedly passing via Ukraine to Europe in line with the schedule.

Gazprom said June 16 that Naftogaz’s past due debt for supplied Russian gas totaled $4.458 billion.

Russia recently raised the gas price for Ukraine to $485.5 per 1,000 cubic meters, but Ukraine has insisted the price should be lowered to that of this year’s first quarter ($268.5 per 1,000 cu m).

The price for Kiev rose to $385.5 per 1,000 cu m in the second quarter of 2014 because Ukraine failed to fulfill its commitments under an additional agreement concluded in December 2013, which obliged the country to pay for supplied volumes of Russian gas in time.

Another raise to $485.5 per 1,000 cu m was due to the cancelation of the Kharkov Accords with Ukraine, which had been struck in 2010 and stipulated that Russia’s lease of naval facilities in Crimea [then part of Ukraine] would be extended by 25 years beyond 2017 - until 2042. The accords also envisioned a $100 discount.

Crimea refused to recognize the legitimacy of authorities propelled to power in Ukraine during a coup that rocked the country in February 2014. The peninsula held a referendum and reunified with Russia in mid-March, seceding from Ukraine after some 60 years as part of it.

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