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    Gazprom Expects to Agree With Ukraine on Gas Transit Payment Soon

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    Russia-Ukraine Gas Conflict (292)
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    Gazprom calculates the gas price according to a formula specified in the contract, Gazprom spokesman said.

    MOSCOW, November 7 (RIA Novosti) – Russian energy giant Gazprom is expecting to come to an agreement with Kiev on future payments for gas transit via Ukraine soon, a spokesman said Friday.

    "Transit payments depend on the price of the Russian gas for Ukraine. Gazprom calculates its price according to a formula specified in the gas contract, while Ukraine is naming its own price. This slows the process down," Gazprom spokesman Sergei Kuprianov said.

    "But we will find a solution to this problem. Everything will be done in line with the Brussels agreements," he added.

    Ukraine is not only a consumer, but also a transit country for Russian gas. Around half of the Russian gas exported in 2013 crossed Ukraine, which amounts to approximately 15 percent of the total amount of gas consumed in Europe, according to the International Energy Agency.

    Earlier this week, Ukrainian Energy Minister Yuriy Prodan told journalists that Kiev expects to receive the next payment for Russian gas transit via Ukraine to Europe in November, while Ukrainian President Petro Poroshenko claimed that Kiev still has not received payments for September-October.

    As the transit payments are directly linked to gas prices, before this issue was agreed upon during the talks in Brussels, there were difficulties in establishing the price for transit.

    Starting from April 2014 up until November Gazprom set the price for gas deliveries at $485 per 1,000 cubic meters of gas, while Naftogaz thought a price of $268.5 per 1,000 cubic meters was more reasonable.

    In August, Gazprom stated that the company had transferred enough money to Naftogaz to cover the bills for transit up until August 2014. Gazprom sent an additional $10.5 million for gas transit in July, however Naftogaz returned the money, stating that it considered the payment erroneous.

    Under the deal reached on October 29-30, Russia agreed to resume the delivery of gas to Ukraine at a price of $378 per 1,000 cubic meters to the end of 2014 and $365 for the same amount in the first quarter of 2015, while Kiev must pay Gazprom $3.1 billion of its debt to the company before the end of December.

    Russia-Ukraine Gas Conflict (292)


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    gas, Gazprom, Naftogaz, Ukraine, Russia
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