Ukraine Warns Russia of Steep Gas Import Cuts in 2013

KIEV, November 26 (RIA Novosti) – Ukraine plans to slash its gas imports from Russia to 18 billion cubic meters in 2013 from 27.5 billion cu m this year, Energy Minister Yuriy Boyko said on Monday.

“We have already informed our [Russian] colleagues of this volume [18 billion cu m],” Boyko told reporters.

The two sides have been locked in a conflict over gas prices since they signed a supply deal in 2009 that ties the price of gas to oil prices, which have risen steeply since 2009, boosting Ukraine’s gas bill. Ukraine is seeking both to cut Russian gas imports and find alternative gas supply sources.

Boyko said Ukraine had not yet filed an official request for the purchase of 18 billion cu m next year.

“As soon as we formalize our official request, we’ll get a response,” Boyko said in response to a question about Russian gas monopoly Gazprom’s reaction to Ukraine’s intention to slash gas imports contrary to the terms of the existing contract.

Boyko previously described moves to slash Russian gas imports as breaching the terms of the contract, and that this would lead to a dispute with Russia, but added that Kiev would safeguard its interests by all legal means.

Gazprom’s long-term contract with Naftogaz contains a “take-or-pay” provision that applies to 80 percent of the contracted volumes for a given year. That means Ukraine must pay for at least 41.6 bcm of gas this year (based on the entire contracted volume of 52 bcm), even if it takes less.

Ukraine has said that, due to high prices, it would slash gas imports from the contracted 52 billion cu m to just 27 billion cu m, possibly as early as this year. Russia’s position is that the contracted volume for this year is already fixed and that no alterations can take place within six months of the contracted delivery date.


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