Trade Resources Company News Russia's Gazprom Asked Ukraine to Pay $7 Billion for Buying Less Gas in 2012

Russia's Gazprom Asked Ukraine to Pay $7 Billion for Buying Less Gas in 2012

Tags: Gazprom, oil, gas

Russia's Gazprom has asked Ukraine's state-run Naftogaz Ukrayiny oil and gas company to pay $7 billion for buying less gas in 2012 than was stipulated under a contract, a source in Naftogaz confirmed Monday. "We have received the bill," the source said.

But the source could not confirm media reports that the Ukrainian company had no intention of paying the bill and is prepared to take Gazprom to court instead.

The Financial Times, citing an unnamed senior official in Kiev, reported Saturday that Gazprom had sent a $7 billion demand to Naftogaz on Wednesday.

Gazprom says Ukraine imported less gas last year than it was obliged to under a minimum take-or-pay clause in a 2009 supply contract, the newspaper said.

Ukraine's news agency UNIAN quoted an unnamed source in Naftogaz over the weekend as saying Naftogaz does not intend to pay the bill. "We have paid in full all the bills by Gazprom for the natural gas we imported," the agency's source said. "We have informed Gazprom about a planned cut in volumes [in 2012] in due course," the source said.

Neither Naftogaz nor Gazprom commented on the reports.

Under a 10-year contract signed in January 2009, Ukraine is obliged to buy at least 33 Bcm/year through the end of 2019 or face tough penalties if it reduces gas imports.

Ukraine's imports of Russian natural gas fell to 24.4 billion cubic meters in 2012 from 40 Bcm in 2011, as Ukraine has failed so far to re-negotiate down the price it pays for Russian gas.

Kiev plans to further reduce imports of Russian natural gas to 18 Bcm in 2013.

Under the 2009 contract, the price of Russian gas for Ukraine was at $431 per 1,000 cubic meters in the fourth quarter 2012, including a discount of $100 per 1,000 cu m. Russia agreed on the discount in April 2010 in exchange for extending the stationing of the Russian navy in Crimea by 25 years.

But Ukraine's Prime Minister Mykola Azarov has repeatedly complained that Gazprom was still charging higher prices to Ukraine than to Germany even though Ukraine borders Russia and transportation costs are much lower.

Source: http://news.chemnet.com/Chemical-News/detail-1803874.html
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Gazprom Asks Ukraine for $7 Bil for Buying Less Gas Than Agreed in 2012
Topics: Chemicals