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FACTBOX: Russian-Ukrainian Gas Row
Monday, 02 June 2014 09:24
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FACTBOX: Russian-Ukrainian Gas Row

MOSCOW, June 2 (RIA Novosti) – The latest round of trilateral gas talks between Russia, Ukraine and the EU mediators in Berlin on Friday saw the parties in the pricing dispute edge towards what seems to be a compromise, though its long-term significance might be overplayed.

Russia’s Energy Minister Alexander Novak said Friday the discussion on gas payments and the price for future gas supplies would resume this week, starting with another round of talks between Moscow, Kiev and Brussels on Monday.

In a surprise breakthrough, Ukraine’s hard-pressed energy firm Naftogas on Friday agreed to cash out $786 million in gas debt payment, instead of the previously announced $2 billion, but failed to negotiate the price of future deliveries.

Kiev keeps rejecting the new price saying it was ready to clear its debt if Moscow agreed to sell gas at the old price, whereas Moscow says it is ready to discuss possible discounts only after it receives first payments.

Ukraine maintains it is ready to repay its debt to Russia in full within ten days after a new agreement with Russia is reached, but the calculations should be based on the price of $268 per 1,000 cubic meters.

Russia’s state-owned giant Gazprom said it would discuss gas discounts with Ukraine if the latter proved its commitment by paying a $2-billion installment first. This condition hasn’t been met yet, and the looming deadline on Ukraine’s first prepayment, due to expire at 10 am on Tuesday, makes the deal even more pressing.

Russia’s Gazprom earlier said that Ukraine would owe Russia about $5.2 billion for natural gas as of June 7, if Kiev didn’t deliver on its payment obligations.

Ukraine’s piling debt burden and the fact that Kiev failed to pay off March and April deliveries made Gazprom reconsider its gas policy in Ukraine and announce a switch to a prepayment scheme, in accordance with the 2009 energy contract between Russia and Ukraine.

An advance bill sent to Ukrainian state energy company Naftogaz for June deliveries, with supplies to be suspended starting June 3 if the debt is not repaid.

With Naftogaz likely to default on its debt again, a decision was taken by the Kiev authorities in April to take the Russian gas giant to court. On April 28, Ukraine’s acting Prime Minister Arseny Yatsenyuk said Kiev had prepared a package of documents to be filed with the international court of arbitration in Stockholm to settle its gas dispute with Russia.

EU Energy Commissioner Guenther Oettinger earlier confirmed that Ukraine’s gas debt to Russia had reached $4 billion, upgrading the previous figure of $3.5. Ukraine

The gas price for Ukraine surged from $268.5 to $485.50 per 1,000 cubic meters in April after Russia annulled two discounts granted previously to the country, following Naftogaz’s decision to halt all payments last November.

source:
 http://en.ria.ru/russia/20140602/190294936/FACTBOX-Russian-Ukrainian-Gas-Row.html

 

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