Gas Relations Between Russia and Ukraine Remain Strained

After the statement by Alexei Miller, Head of the Gasprom as regards a possible transfer to the system of prepayment for next Russian gas supplies if Ukraine fails in the near future to pay the debt in the amount of $882m for gas supplies in August 2013, repayment of the debt of the NAK Naftogas Ukraina to the Gasprom started in the beginning of November.

Due to a large-scale accumulation of debts by enterprises of the heat power industry, Ukraine directs all the available funds to repay the debt, however the full repayment of the debt is still far away. As of November 6, the debt decreased by the mere $90m.

Due to the above, fr om November Kiev reduced purchases of Russian gas by nearly 60% as compared to the volumes bought in the previous month. In addition to the above, Ukraine plans in future to lim it the import of the Russian fuel and manage by means of the gas accumulated in underground storages for public utility needs.


Also, from 2010 Ukraine has carried out negotiations with Russia on a possible price reduction on gas as it considers the price to be too high. In October 2013, the average price of the Russian gas amounted to $410 per 1,000 м3. From the end of 2012, Ukraine started to import gas through Poland and Hungary and carried out negotiations on reverse deliveries with other countries of Europe, including Romania and Slovakia.


Apart from that, Ukraine refuses to pay the full price accrued by the Gasprom for gas deliveries in October despite the "take or pay" term of the contracts concluded in 2009 having threatened that irregularities in gas supplies to Europe paid in advance by the Russian gas holding might take place.


It is obvious that a new "gas war" is not advantageous to any country and the EU expects the dispute to be settled in the near future and Kiev to fulfill the terms of gas contracts in good faith and not to impede the transit of Russian gas to Europe on the eve of the winter season.


D.V. Larionova, Researcher of the Structural Research Center