Naftogaz, Gazprom exchange claims in Amsterdam

Top managers of Ukrainian and Russian gas monopolies met in Amsterdam for a working meeting on May 16, press services of the companies reported the same day. The releases of the two companies look very different.

Gazprom reported that the core topic of the meeting was the need for the Ukrainian side to repay its debt for natural gas imported until end-April. As before, Gazprom estimates this debt at USD 3.51 bln. This includes USD 1.64 bln payable for 1Q14 (when the gas price was agreed at USD 268.5/tcm) and USD 1.27 bln payable for April supplies, for which Gazprom wants to charge USD 485.5/tcm.

Naftogaz (NAFTO) reported in its release that the 81% qoq increase of price for Russian gas (since April) is “ill grounded and not acceptable”. It confirmed its readiness to fully repay the debt, if Gazprom accepts the gas price for Ukraine at USD 268.5/tcm in 2Q14.

Alexander Paraschiy: The Russian and Ukrainian sides clearly do no look ready for a compromise, so the only hope for some mutual decision is related to a possible three-sided meeting with involvement of the EU Energy Commissioner which may take place this week. Given that the previous trilateral meeting, held on May 2, was fruitless, we do not expect a compromise will be reached on the next one, and it will take lot of time and many meetings. Naftogaz has no reason to hurry: year-to-date, it has imported as much gas as in 7M13, and can easily live without Russian gas until a new heating season starts (mid-October). It is more important for Russia and the EU that a new price is agreed upon as soon as possible, so that Russia does not stop supplies of gas to Ukraine, and to the EU through Ukrainian territory.