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17 June, 2014 23:10   ▪  

Premier Yatseniuk links disruption of gas talks to the signing of the Association Agreement

Ukraine’s Premier Arseniy Yatseniuk believes that Russia has disrupted gas talks not least because of the upcoming visit of President Petro Poroshenko to Brussels to sign the economic part of the Association Agreement with the EU, he said when speaking in Parliament

“It is clear that all this mess with gas has been set up before the visit of the Ukrainian President to Brussels, among other things, where he will sign the second part of the Association Agreement with the EU, the economic one it is,” Yatseniuk said.

He added that “the government is persistently following the path of specific implementation of Ukraine’s European integration”.

Earlier, gas talks between the Ukrainian Naftogaz and Russian Gazprom failed as both companies sued each other at the Stockholm Court.

RELATED ARTICLE: Is Gazprom on the Ropes?

Gazprom wants Naftogaz to pay USD 4.5mn as its debt for the gas already used and the advance payment for gas to be used in the future. Ukraine refused to satisfy these demands, so Gazprom suspended the supply of gas to Ukraine on June 16. In turn, Naftogaz has sued Gazprom demanding it to return Ukraine the overpayment for the gas it has supplied to Ukraine since 2010 at the inflated price of USD 485 per 1,000 cu m. According to Naftogaz’s estimates, this overpayment amounts to USD 6bn. Under the advance payment regime, Ukraine would have to pay Gazprom the amount due for the July supply in June.

RELATED ARTICLE: Lock, Stock and Two Smoking Pipes: Russia’s gas talks with Ukraine are just a small element of its geopolitical game. The jackpot is control over energy supply to Europe

The current price for Ukraine as specified by Gazprom is USD 485 per 1,000 cu m. Earlier, Gazprom had made its final offer on the gas price for Ukraine at USD 385 per 1,000 cu m. Ukraine considers this overpriced and has not accepted the offer. According to Gazprom Export as referred to by Bloomberg, the Russian monopolist charged its European customers slightly above USD 380 per 1,000 cu m in 2013, compared to USD 385 and USD 383 per 1,000 cu m in 2012 and 2011 respectively.  

RELATED ARTICLE: Gazprom’s Nightmare

Also, Ukraine does not accept the scheme offered by Russia for changing gas price whereby Gazprom offers Ukraine a discount in exchange for levied export duties. Ukraine fears that Russia can eventually unilaterally cancel the discount as it did starting from April 1, 2014.

“We have many offers… on reverse supplies which are far below USD 385 per 1,000 cu m,” Yuriy Prodan, Ukraine’s Minister of Energy and Coal, said on June 11. “Given the transit through Ukraine’s territory and reverse transit in European countries, we can say that Gazprom’s price can be even lower than what European suppliers offer now.” 

RELATED ARTICLE: Ukraine Must Change Its Position In Gas Talks


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