Thursday, 1 September 2011

Ukraine Must Pay For 33 Bcm Of Gas Regardless Of Delivery - Gazprom

MOSCOW, Russia -- Kiev must pay for 33 billion cubic meters of gas a year regardless of actual purchases, as stipulated by the contract between Russian gas giant Gazprom and Ukraine's national energy firm Naftogaz, Gazprom CEO Alexei Miller said on Wednesday.
His comments came in the wake of Ukraine's request for 27 bcm of gas next year, well below this year's 40 bcm.

"Gazprom may supply Ukraine with 26, 27 or 29 bcm of gas in 2012 or supply nothing if Ukraine wants," Miller told reporters.

"In any case Naftogaz of Ukraine will pay for supplies on the basis of no less than 33 bcm. These are take-or-pay terms under the current contract and they will be used this year and for the duration of the contract."

Ukraine has been seeking a revision of its 2009 gas deal with Russia since last spring, saying that the gas price formula is unfair.

Russia has tied the price for gas to the international spot price for oil, which has been rising strongly recently.

Ukraine's presidential administration head Sergei Lyovochkin has said Kiev had set an October 15 deadline for trying to revise the contract, UNIA agency reported.

The date is the start of the heating season in Ukraine.

The 2009 contract was signed by former prime minister Yulia Tymoshenko who is now on trial for signing it.

Last week Russian President Dmitry Medvedev said the contract must be fulfiled but added that discounts were possible if Kiev joined the Customs Union of Russia, Belarus and Kazakhstan and agreed that acquisition of its Naftogaz energy company by Gazprom.

In January 2009, a pricing row between Moscow and Kiev led to a stoppage of Russian gas flows to Europe for about two weeks, tarnishing Moscow's image as a reliable exporter and spurring a European quest for new suppliers.

Gazprom's clients have long been complaining about its long-term contracts which include the 'take-or-pay' principle, saying prices were lower on the spot market.
Italy's Edison recently won a court ruling which helped it cut gas prices.

Germany's E.ON, one of Gazprom's key Western clients, has also gone to court over prices.

Gazprom has recently had to cut prices for Greece.

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