Ukraine Says Ready to Face Russia in Row Over Gas Imports

KIEV, November 17 (RIA Novosti) – Ukraine is prepared to defend its interests in a potential row with Russia over the breach of contractual obligations under the existing gas imports contract, Fuel and Energy Minister Yuriy Boyko said.

Ukraine’s energy company Naftogaz announced on Friday plans to slash its gas imports from Russia from 27.7 billion cubic meters this year to just 20 billion next year.

“We will certainly argue [about the reduction in gas imports] with our Russian colleagues, may be even in courts, but we know that we are absolutely right and we will act in accordance with our national interests,” Boyko said in an interview with Inter television on Friday night.

“We have consulted with legal experts on this issue and I can assure you that we are ready for this,” the minister added.

The two sides have been locked in a conflict over gas prices since they signed a supply deal in 2009.

Naftogaz’s contract with Gazprom has a “take-or-pay” clause which covers 80 percent of the amount of gas set out in the contract.

Following from the 52 billion cu m set out in the contract, Ukraine is required to pay for not less than 41.6 billion cu m of gas.

Ukraine has previously said it would slash gas imports due to high prices as soon as this year, from the contracted 52 billion cu m to just 27 billion.

Boyko said Ukraine will buy 26 billion cu m from Russia in 2012 and pay only for the purchased supplies.

Russia has said the contracted volume for 2012 is already fixed and cannot be altered within six months of the contracted delivery date.

Boyko insisted that Kiev would defend its position at all levels and cited precedents involving some European companies that won court battles with Russia’s energy giant Gazprom over reductions in gas imports.

“We have no choice. We cannot afford closing down our mines and firing our people in order to buy overpriced gas,” he said.


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