Gazprom claims Naftogaz owes it USD 3.5 bln for natural gas

The total debt of Naftogaz (NAFTO) to Gazprom for natural gas it imported until May 2014 is estimated at USD 3.49 bln, Sergei Kupriyanov, Gazprom spokesman reported to Interfax on April 30. The total import of Natural gas by Naftogaz amounted to 2.6 bcm in April (up 32% compared to March), according to Interfax, which is valued at USD 1.25 bln, based on the price declared by Gazprom (USD 485.5/tcm).

Recall, on April 17, Russian president Vladimir Putin demanded that Ukraine fully repay its debt for gas to Gazprom within one month.

Alexander Paraschiy: Naftogaz’ decision to increase gas imports in April 2014 (when Gazprom demanded payment at USD 485.5/tcm) instead of doing more purchases in the three previous months (when the gas price was agreed at the level of USD 268.5/tcm) clearly lacks logics. In 1Q14, Naftogaz imported 6.05 bcm of gas from Russia, which is the lowest amount for at least the last four years. To compare, Ukraine imported 7.1 bcm in 1Q13 and 17.9 bcm in 1Q11.

A possible explanation for the decision to increase gas imports in April is Naftogaz’ attempt to make Gazprom more willing to provide a discount for gas (to USD 268.5/tcm, or at least USD 385.5/tcm). Ukraine’s PM Arseniy Yatsenuk promised on April 28 that Ukraine would repay all its debt if Gazprom agrees to charge USD 268.5 per tcm of gas in 2Q14. As we understand it, this means that Ukraine is not going to repay its debt for gas just now. This may lead to the termination of gas supplies to Ukraine and to the EU (through Ukraine) in the coming months. But Ukraine can live without Russian gas, at least over the next five months. As Ukraine’s debt for gas to Russia is increasing each month, and the risk of interruptions of gas supplies to the EU through Ukraine is increasing (this will harm both, Gazprom and its EU suppliers), it seems that Gazprom is becoming more likely to agree on some gas discount for Ukraine.