Russia, Ukraine agree on gas price at $385 per 1,000 cu m for winter
MILAN — Russia and Ukraine have agreed that the gas price for the winter will total $385 per 1,000 cubic meters, and Kiev is ready for prepayment of supplies, Russian Energy Minister Alexander Novak said Friday. “An agreement on the price of $385 has been reached, Ukraine is ready for prepayment of gas supplies,” Novak told journalists. *
He said the talks will resume on October 21 in Brussels. “We have agreed on the key parameters – on the price for gas supplies in the winter period, on prepayment terms and on the debt repayment schedule,” Novak said. “The question now is whether Ukraine has sources to repay the debt and pay for current deliveries.”
The Russian energy minister said work would now be conducted to seek financial guarantees and sources of financing with involvement of the European Commission, the European Union’s executive body.
Ukraine, which transits Russian gas on to European consumers, currently does not receive Russian gas for its own needs due to an unsettled dispute with Moscow over prices.
Russian state-controlled energy giant Gazprom on June 16 switched Ukraine’s 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 for its own needs were halted, but transit volumes were reportedly passing via Ukraine to Europe in line with the schedule.
Putin pledged Thursday that Russia would provide enough gas to Europe in winter. “I can tell you for sure and am saying with absolute responsibility: there will be no crises in Europe due to the fault of Russian participants of energy cooperation,” he said.
In late 2008 – early 2009, a gas dispute between Moscow and Kiev saw Russia cut off gas supplies to Ukraine on January 1, 2009 over unpaid debts. Gas deliveries to European consumers were affected because Ukraine apparently started siphoning off transited gas. The dispute was resolved on January 18, 2009.
* Russia Today reports Vladimir Putin as saying that Russia is not ready to supply gas to its eastern neighbor without pre-payment. He said that Kiev still owes Moscow some $5.5 billion, but is ready to reconsider this sum and a provide a discount of $100 per one thousand cubic meters. This will reduce the debt to $4.5 billion.
* Hope and obstacles as Russia and Ukraine seek gas deal, Reuters, Oct 20, 2014
* A natural gas price of $385/per 1,000 cu m places Ukraine in the mid-range of prices paid in Europe for Russian gas:
* Ukraine is one of the largest purchasers of Russian gas, after Germany