Naftogaz blames Gazprom for breaching gas contracts

Gazprom supplied only 47 mcm in natural gas to Ukraine as of Feb. 22 out of 114 mcm that was ordered, according to Naftogaz’s Feb. 23 press release. The Ukrainian gas monopoly interprets this as a breach of a supply contract and of an interim agreement signed on Oct. 30, 2014. According to Naftogaz, it filed an order to increase daily gas supplies to 114 mcm per day on Feb. 19 (which is the maximum possible order, according to the last deal), and this order should have been executed no later than in two days.

Naftogaz has requested an explanation from Gazprom, the company stated.It also declared that it prepaid Gazprom for 287 mcm of natural gas, as of early Feb. 23. Gazprom, in its turn, responded by stating that it hadn’t increased gas deliveries for Ukraine “because Ukraine’s prepayment would be enough for only two days” at that level, according to a Bloomberg report on Feb. 24.

Alexander Paraschiy: With its statement, Gazprom has yet to offer its defense of whether its moves violate the contract. Interestingly, Russian President Putin ordered PM Dmitry Medvedev to “adhere to contractual obligations with Ukraine and strictly implement them,” as Interfax reported on Feb. 20.

Gazprom’s behavior looks like the latest “refusal of subordinates” to adhere to the president’s orders. This is not something new for Russian officials – we can recall how many times in 2014 the Russian army ignored the president’s orders to halt their exercises near the Ukrainian border. Or how the “stubborn” Donbas separatists refuse to adhere to the ceasefire.

We believe Ukraine and Russia are approaching a new gas conflict that will start already this week.