Gazprom informs Naftogaz on USD 2.4 bln debt for earlier imported gas
21 January 2015
Russian gas monopoly Gazprom sent a letter informing its Ukrainian counterpart, Naftogaz, on an existing USD 2.44 bln debt for part of earlier imported gas, CEO Alexey Miller said at his Jan. 20 meeting with Russian PM Dmitry Medvedev, according to Interfax. The debt consists of USD 2.20 bln in arrears for earlier imported gas and USD 0.24 bln in penalties, according to Miller. The USD 100 discount per tcm of Russian gas that Ukraine enjoys now will terminate on April 1, he said.
Alexander Paraschiy: Statement on Naftogaz’s debt made by Miller, who was publicly reporting to his boss yesterday, should not have any immediate consequences for Naftogaz, we believe. It only clarifies the Russian position on its gas deal with Ukraine.
In particular, the Russian position is that Ukraine owes USD 5.3 bln for about 11.5 bcm in earlier gas supplies, as of end-June 2014. These arrears consist of USD 1.45 bln in gas that Ukraine bought in November-December 2013 (at a contract price of USD 394/tcm) and USD 3.85 bln for gas imported in 2Q14 at a price of USD 485/tcm. Ukraine, in its turn, did not recognize this price, which resulted in Russia’s unilateral cancellation of a USD 100/tcm discount for gas to Ukraine. Moreover, Ukraine claimed it was ready to pay only USD 3.1 bln for the 11.5 bcm, insisting that the “true price” for this amount should be USD 268/tcm (that was the valid price in 1Q14).
Russia and Ukraine reached an interim agreement on Oct. 30, which stipulated that Ukraine would repay the USD 3.1 bln debt (that it recognizes) by the end of 2014. Naftogaz paid this undisputed amount. Any other settlements will be made after the decision of the Stockholm Arbitration Court, as we can conclude from a Naftogaz press release of Nov. 4.
Yet the Stocklholm court hearing on gas pricing is unlikely to finish this year, so a final settlement of earlier accumulated gas debt by Ukraine will not be reached soon, we believe. The final debt figure could turn out to be less than Gazprom claims. In particular, it will be USD 1.4 bln (instead of USD 2.2 bln) should Ukraine prove that Russia had no grounds to cancel the USD 100/tcm discount for 2Q14.
