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Thursday, October 8, 2015

Ukraine, feeling winter chill, pays $378 million for Russian gas

– With freezing temperatures gripping Kiev, Ukraine’s state energy firm Naftogaz said on Friday it had transferred $378 million to Russia’s Gazprom to buy Russian gas for December, paving the way for the first shipments since Moscow cut supplies in June.

Flows to Ukraine from Russia were severed in a dispute over prices and debts. In line with a deal signed by Naftogaz and Gazprom in October, they should resume within 48 hours from when the Russian firm receives the transfer.

Cash-strapped Kiev had delayed buying new supplies, but increasingly cold weather has forced it to draw down on severely depleted reserves.

Naftogaz did not say how much gas it planned to buy, but earlier the energy ministry said this could be about 1 billion cubic meters.

Ukraine, a former Soviet republic, is one of the largest consumers of Russian gas with annual imports of around 30 billion cubicmeters.

It is also the major route for Russian gas transit to Europe withRussia pumping around half of its gas exports through Ukrainian pipelines to prime marketsthere.

Ukraine and Russia signed an agreement, brokered by the European Commission, at the end of October to cover gas supplies over the winter months as a temporary solution to a long-standing price dispute.

Russia, whose relations with Ukraine are politically complicated by its support for a separatist rebellion in Ukraine’s east, had insisted Kiev pay for supplies in advance.

Since the start of the heating season in late October, reserves have fallen 17 percent to 13.9 billion cubic meters as of Dec. 1, according to data from Ukrtransgaz, the state-run gas transport monopoly.

Ukraine’s energy ministry has said Kiev might buy an additional 1.5 bcm of gas in the first quarter of next year.

Source: Reuters

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