Brussels, 05/11/2014 (Agence Europe) - On Tuesday 4 November, Ukraine's gas company Naftogaz announced that it had paid the first $145 billion instalment of its debt to Russian gas company Gazprom, as provided for in the agreement concluded between Russia and Ukraine, under EU mediation, on 31 October.
This announcement was welcomed immediately by European Commissioner for Energy Union Maros Sefcovic from Slovakia, who took up office on 1 November. “I am delighted to hear that Ukraine's Naftogaz has kept its end of the bargain and paid the first tranche of its debt to Russia's Gazprom (…) With winter at the doorstop it is essential that gas flow from Russia to Ukraine can be restarted. This is an important step in order to secure gas flows for citizens and business in Ukraine and in the European Union alike”, said Sefcovic.
Valued at $4.6 billion, the package for winter 2014-15 focuses on the pay off of Ukraine's debt and the modalities of payment for deliveries until March 2015. It is based on the payment by Naftogaz for part of its gas to Gazprom at the price of $268.5 per 1,000 cubic metres, and in two instalments: $145 billion immediately and $1.65 billion by the end of 2014 - in other words, $3.1 billion by way of settlement for Ukraine's debt. Russia, which wants a total arrears of $5.3 billion, has agreed to appeal to the international arbitration court for the remaining $2.2 billion. The final price and the final amount of the Ukrainian debt will be determined by the ongoing arbitration, which has been brought before the Stockholm Chamber of Commerce.
Russia is committed to supplying gas to Ukraine until March 2015 at a price of less than $385 per 1,000 cubic metres. Ukraine's payment will be made in advance on a monthly basis. The price paid by Ukraine will be calculated according to: - a formula already written into the current contract between Gazprom and Naftogaz (the price of gas is indexed to the price of oil - a situation which would reportedly be of benefit to Ukraine due to the current low price per barrel, according to the Commission); - and a reduction in price through a decrease in Russia's export taxes. Ukraine is free to order as much gas as necessary and will not be subject to the take-or-pay obligations in the contract. Ukraine plans to buy 4 billion cubic metres at the end of 2014, which means $1.5 billion. (EH)