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9 October, 2013 15:12   ▪  

Expert on Putin’s gas discount statement: Gazprom is trying to save itself through Firtash’s group, its agent in Ukraine

Vladimir Putin’s statement of Gazprom’s discount for gas sold to Ukraine is an attempt to portray himself as Ukraine’s benefactor, comments Mykhailo Honchar, Energy Programme Director at the NOMOS think tank

“Putin has once again portrayed himself as a benefactor of Ukraine… However, Gazprom is saving its own skin in this situation using Firtash’s group, its strategic agent in Ukraine, as a tool. This gas is not essentially for Naftogaz, and it has little to do with Ukraine. Putin wants to show Europeans how much he cares to keep them warm in winter. His statement is sort of a public report for Europeans,” the expert notes. The discount is for 5bn cu m of what is known as technical gas stored in Ukraine’s underground facilities for European consumers in case the winter turns out unexpectedly cold.

Honchar notes that Gazprom is fully responsible to its European clients and must pump that much gas into Ukrainian storage facilities.

“Naftogaz is only technically responsible and in charge of the technical aspect of the Russian gas transit. Ukraine’s task is to maintain the necessary pressure in gas pipes and monitor gas flow in the transit system and output from it,” the expert adds.

READ ALSO: Is Gazprom on the Ropes?

According to Honchar, Gazprom today “provides this gas to Ostchem Holding which is part of Dmytro Firtash’s group to be stored in underground facilities and sold to Europe when gas consumption peaks there in winter.”

“As far as it is currently known, this is a commercial deal between Gazprom and the group that plays the role of its agent. In winter, by the way, the price of this gas may double, so Firtash & Co, as well as Gazprom, will make good money on it,” Honchar says.

According to the press, Ukrainian underground storage facilities now contain over 14bn cu m of gas. Sources in Gazprom claim that the Russian monopolist will sell another 5bn cu m to Ostchem as part of its quota for the next year (8bn cu m) provided that this amount is pumped into Ukraine’s storage facilities. Gazprom does not comment on this situation officially.

READ ALSO: Diversification or Dmytrification?

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