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26/09/2016

Gazprom demands $2.5 billion for gas Ukraine didn’t import

Europe's East

Gazprom demands $2.5 billion for gas Ukraine didn’t import

Gazprom advert. Moscow, 2010.

[Albert Alien/Flickr]

Russian gas giant Gazprom yesterday (19 January) fired off a new salvo in Moscow’s feud with Ukraine by demanding some $2.5 billion (€2.28 billion) for Kyiv allegedly breaching its supply contract.

Gazprom said in a statement that under the terms of its deal with Ukraine state firm Naftogaz, Kyiv had to purchase a minimum annual amount of gas, or face a penalty and that supplies had fallen short of the required level in the third quarter of last year.

“Taking this (minimum level) into account and the volume of gas delivered by Gazprom to Ukraine in the third quarter of 2015, Naftogaz Ukraine has been sent a bill for $2.549 billion,” the statement said.

“Gazprom is waiting for the bill to be settled in the next 10 days,” it said.

The move is the latest step in Russia’s fallout with its ex-Soviet neighbour that started with the ouster of Kremlin-backed leader Viktor Yanukovych in early 2014, which saw Moscow seize Crimea and back pro-Russian separatists in east Ukraine.

Take-or-pay

In fact, Ukraine has objected to the so-called take-or-pay clause even under the former regime of Yanukovich.

>> Read: Ukraine rejects ‘take-or-pay’ gas deal

The crisis has also sparked a lengthy gas dispute between the two countries that has seen Gazprom turn off supplies to Kyiv and the European Union step in to help negotiate a new deal between the two sides.

The CEO of Naftogaz, Andriy Kobolev, told EurActiv on 18 January that since Russia knew it cannot win militarily in Ukraine, the best it could do is damage the Ukrainian economy by waging gas wars.

>>Read: Ukraine says opposition to Nord Stream 2 is growing

Ukraine has been trying to wean itself off its reliance on Russian gas and bought practically no supplies from Gazprom in the third quarter of last year, according the Russian company.

There was no immediate response from the Ukrainian side to the demand.

Ukraine’s standoff with Russia has also recently been accompanied by an escalating trade war and a heated disputed over an overdue $3 billion loan (€2.8 billion) that Moscow extended to Yanukovych and which cash-strapped Kyiv now refuses to repay in full.

Kyiv argues that Moscow lent its ally the money on preferential terms as a bribe for Yanukovych’s shock November 2013 decision to scuttle a free trade agreement with the EU that Kyiv has since signed.