Natural gas again flowing into Ukraine.

Gas works maintenance, Lvov. Stock photo

RIA Novosti, October 12, 2015

October 30, 2015
Translated from Russian by Tom Winter

MOSCOW. Gazprom has received a $234 million prepayment from Naftogaz Ukraine for gas deliveries in October and thus has resumed gas exports to Ukraine after a three-month break, Alexei Miller, head of Gazprom, told reporters.

“Today at 10:00 Gazprom started supplying gas to Ukraine. A prepayment of $234 million, of the $500 million promised in October, has been received from Naftogaz of Ukraine. Ukraine requested the maximum mode of delivery – 114 million cubic meters per day, which corresponds to an annual delivery to Ukraine of 52 billion cubic meters,” said Miller.

On Friday, the head of “Gazprom” announced an agreement with “Naftogaz Ukraine” on the advance payment and the planned resumption of supplies.

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“Naftogaz” later confirmed these agreements, and said that an advance payment has been transferred. The Ukrainian side has sent Gazprom a request for the supply of 2 billion cubic meters of gas in October, Miller reported.

The winter gas package that Ukraine, the Russian Federation, and the EC initialed on 25 September stipulated a Naftogaz purchase from Gazprom of 2 billion cubic meters of gas, on a $500 million loan raised with the help of the European Commission. As part of this winter package, the Russian government gave Ukraine a discount for the fourth quarter of about $20 per thousand cubic meters. The actual contract price is 248-252 dollars per thousand cubic meters, said the Russian Energy Minister Alexander Novak.

An additional agreement between Gazprom and Naftogaz provides for waiver of the “Take or Pay” condition for the period to March 31, 2016. In addition, it stipulates the possibility for Ukraine to select the gas in the daily operation up to 114 million cubic meters. [“Take or pay” means if the buyer does not take the full stipulated amount, the buyer pays a penalty — Tr.]

From January-June 2015 Ukraine bought 3.7 billion cubic meters of Russian gas. In July, August and September, Naftogaz bought no gas from Russia. The Ukrainian side was not satisfied with the price, which with a$40 discount was to be 247.17 dollars per thousand cubic meters. During this period Ukraine got along with buying gas in reversal. [I.e. from Europe — Tr.]

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