Ukraine ready to pay debt to Gazprom at $268

Photo: Ukraine ready to pay debt to Gazprom at $268 / Politics

Ukraine is ready to pay its debt to Russia's Gazprom for gas supplies at a price of 268.5 U.S. dollars per 1,000 cubic metres, acting Energy and Coal Industry Minister Yuri Prodan said, according to ITAR-TASS.

"Ukraine is ready to pay the debt. But we cannot pay the price Gazprom set from April 1. It is unjustifiably high and is about 500 U.S. dollars. We are ready to pay under our obligations," the minister said on Monday, April 28.

He said that the Ukrainian gas transit system would be incorporated into the European gas transportation system. "We can also use the possibilities of our underground gas storage facilities and hope that European gas companies will build up their reserves in our storage facilities," he said.

Ukraine and Slovakia signed a memorandum of intent in Bratislava earlier in the day, agreeing to organise reverse-flow gas supplies to Ukraine.

A source familiar with the situation told ITAR-TASS that the amount of gas supplied in reverse mode might increase to 10 billion cubic metres.

The two countries also agreed to explore the possibility of reverse-flow supplies by the transit pipeline used by Gazprom to deliver gas to Europe.

According to Prodan, reverse-flow supplies can reach 8 billion cubic metres by September 1, 2014, not by 2015. Gas will be supplied by the Vojany-Uzhgorod pipeline, not the transit pipeline.

EU Energy Commissioner Guenther Oettinger said such supplies would not require the Russian company's agreement and would give Ukraine up to 10 billion cubic metres of a gas a year but stressed that reverse-flow gas supplies from Slovakia to Ukraine by the trunk pipeline would be impossible without Gazprom's consent as it would run counter to the Slovak company Eustream's contractual obligations.

Oettinger believes that diversification of supplies will help to solve Ukraine's gas problem in part. However reverse-flow supplies from Poland and Hungary by the Vojany-Uzhgorod pipeline will not be enough for Ukraine get through the coming winter comfortably.

He also said that the European Union was providing support to Kiev on the repayment of its gas debt to Russia.

Meanwhile, Naftogaz of Ukraine is planning to transport gas from Poland under a contract with Germany's RWE until the end of April and throughout May.

According to the declared volumes, Naftogaz of Ukraine is to get 4.022 million cubic metres of gas from Poland on April 15-22; 4.08 million cubic metres a day on April 23-30, and 4.022 million cubic metres on May 1-31. Up to date, Ukraine was supposed to receive about 40 million cubic meters of gas from Poland.

RWE AG resumed gas supplies to Ukraine through its division RWE Supply and Trading on April 15 under a five-year framework agreement with Naftogaz of Ukraine signed in May 2012.

"RWE supplies to Ukraine are based on the European pricing principles, including transportation costs. The agreement provides for the delivery of up to 10 billion cubic metres of natural gas a year," Naftogaz of Ukraine said.

In 2013, RWE supplied about 1 billion cubic meters of gas to Ukraine.

The maximum amount of gas Ukraine can get from Poland is 4 million cubic metres a day. However, "RWE has reiterated its readiness to increase gas supply to Ukraine as soon as transportation restrictions are lifted on the Slovak-Ukrainian border," Naftogaz of Ukraine said.

The European Union has promised assistance to Ukraine in diversifying natural gas supplies.

Kiev is planning to buy about 290 million cubic metres of gas in Europe in reverse mode (about 140 million cubic metres will be delivered through Poland and the rest through Hungary).

Ukraine has been receiving natural in reverse flows from Europe since November 1, 2012. The gas is supplied across the Ukrainian border with Poland under a contract with from German RWE.

The gas is supplied across the Ukrainian border with Poland. RWE planned to supply up to 5 billion cubic metres of gas to Ukraine until May 2013. Last year Naftogaz Ukrainy imported 55 million cubic metres of gas using the reverse flow scheme.

The throughput capacity of the Ukrainian gas transportation is 288 billion cubic metres system at the entrance and 178.5 billion cubic meters at the exit, including 142.5 billion cubic metres to European countries and 3.5 billion cubic metres to Moldova. Natural gas transit through Ukraine to Europe and CIS countries in 2011 increased by 5.7% from 2010 to 104,197,067,000 cubic metres, including to Western Europe by 5.9% to 101,098,013,000 cubic metres, but decreased by 2.4% to 3,099,054,000 cubic metres to CIS countries.

Ukraine's gas transportation system consists of 72 compressor stations, 110 production shops and 1,451 gas distribution stations. The overall length of gas pipelines operated by the company is 38,600 kilometres, including 22,200 kilometres of trunk pipelines and 16,400 kilometres of extensions.

Ukraine consumes over 50 billion cubic metres of gas annually.

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