Russian state-owned gas export monopoly Gazprom confirmed on June 2 that it had received $786 million from Ukraine to settle a gas debt for the first quarter of 2013 priced at $269 per thousand cubic meters. As a result, Alexey Miller, CEO of Gazprom, told Interfax that it would postpone switching to a prepayment regime for Ukraine’s state-owned gas monopoly Naftogaz until June 9.
The energy ministers of Ukraine,
Russia and the European Union are currently in talks to agree on an interim
price for Russia-supplied natural gas to Ukraine for the second quarter to
resolve a pricing dispute that has geopolitical undertones.
Ukraine still is contesting $1.45 billion worth of gas priced at $380
per thousand cubic meters supplied in 2013.
Experts say that Ukraine’s partial gas debt payment reduces the probability of Gazprom cutting off supplies for the time being. But the
possibility that both sides will reach a final gas price this week mediated by
EU Energy Commissioner Gunther Oettinger is low.
“This week is a heavy week in
terms of big geopolitical meetings, with (U.S. President Barack) Obama off
to Warsaw, then the G7 meetings in Brussels, (Russian President Vladimir) Putin then
meeting (French President Francois) Hollande in Paris, and then heading off to the D-day
commemorations in Normandy on Friday…so Moscow possibly did not want the
prospect of gas cuts this week to dominate the agenda, and sour the mood for
Putin’s visits” said Timothy Ash, an analyst with Standard Bank in London.
The gas price that Russia could give to Ukraine is also unknown. Neither party commented after the latest talks on gas prices
under discussion,
Dragon Capital stated in a note to investors. Ukraine has insisted on retaining
the $268.5 price level, while
the EU energy commissioner has
said $350-390 per thousand cubic meters is closer to market rates. Ukraine will seek a price closer to $300/tcm arguing about its proximity to the Russian
border.
Yet, the price could be higher, said Ukrainian gas expert Yuriy Korolchuk.
“Ukraine can get $385, minus $100 from the current contract”, he said.
Meanwhile, Ukraine has 11.76 billion cubic meters of gas in underground
storage as of May 30, stated Alexander Paraschiy of investment bank Concorde
Capital. To secure uninterrupted supplies of Russian gas to Europe, Ukraine
will have to accumulate about 18 billion cubic meters of gas by mid-October,
meaning it would have to start importing Russian gas in mid-September.
“We estimate Ukraine can easily survive without importing Russian gas
until late October 2014,” added Paraschiy.
Later year, according to Eurogas, EU gas consumption was nearly 462
billion cubic meters, with Gazprom supplying 27 percent of it. Overall Russia
supplied 40 percent of Europe’s gas imports.
On the other hand, Ukrainian Prime Minister Arseniy Yatseniuk stated
that the nation is ready to take Russia to the Stockholm Arbitration Court. Germany,
Poland and Lithuania have successfully arbitrated against Russia to secure
cheaper gas prices.
Ukraine’s
president-elect Petro Poroshenko has not yet indicated his
position on the gas dispute with Russia. He does, however, have an opportunity to
meet Putin on June 6 in Normandy. He will be inaugurated
the next day.
Kyiv Post staff writer Iana Koretska can be reached at [email protected].
