Ukraine Plans to Temporarily Halt Russian Gas Purchases

Ukraine | March 24, 2015, Tuesday // 11:32|  views

File photo by BGNES

Ukraine’s energy minister has said the country intends to stop buying Russian natural gas for the time being as of April 1 when Kiev’s current supply deal with Moscow expires.

Volodymyr Demchyshyn, Ukraine’s Energy Minister, told journalists in Kiev on Monday his country doesn’t need to buy Russian gas “at the moment”, as it had started to deiversify, increasing reverse-flow imports from the EU as the conflict with pro-Russian rebels in its eastern regions intensified over the past year.

Meanwhile, the European Commission is mediating a new round of talks for a longer term deal between Moscow and Kiev after the so-called ‘winter package’ expires at the start of April.

Any disruption to the supplies of Russian gas to Ukraine is a source of major concern to the EU which receives about a third of its gas from Russia via Ukraine transit pipelines.

“There is no justification to buy gas at a higher price than that which we are paying to Europe, so I think we’ll just stop buying it,” Demchyshyn said.

Ukraine imported natural gas from Europe at an average price of USD 322.5 per 1,000 cubic metres compared to USD 341.2 in December 2014. The price for Russian gas imports was USD 335.7 per 1,000 cubic metres compared with USD 384.9 in December.

Russia’s Energy Minister Alexander Novak said last week following talks with Demchyshyn and EU energy chief Maros Sefcovic in Brussels that the three sides had agreed to continue talks over the pricing of Russian gas deliveries within the so-called 'summer package'. Moscow and Kiev are at odds over the price Ukraine is to pay after the ‘winter package” expires at the end of March.

According to Demchyshyn, Ukraine sees a reasonable price for Russian gas supplies from the start of April at USD 240-250 per 1,000 cubic metres, while Russia insists on USD 348 per 1,000 cubic metres. Ukraine currently pays USD 329 per 1,000 cubic metres of Russian gas imports.

Demchyshyn said a decision on buying Russian gas after April 1 haalready been formulated technically.

I think it will be signed on April 13 or 14," Demchyshyn said, adding Kiev would like the new deal to last until summer 2016.


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Tags: Ukraine, Russia, gas, supply, Kiev. Moscow, Novak, Demchyshyn, agreement, deal


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