Interfax: Russia’s Gazprom head says Ukraine gas debt can’t go on forever

Russian Gas Facility file photo

(Interfax – March 5, 2014) Ukraine must pay its debt for gas supplied by Russia based on the contracts signed in 2009, Aleksey Miller, the head of Russian gas giant Gazprom, has said, as reported by privately-owned Russian news agency Interfax on 5 April.

Meanwhile, Gazprom spokesman Sergey Kupriyanov has said Ukraine has no grounds to take Russia to international arbitration over the gas price, Interfax reported, quoting a TV interview. Ukraine must pay – Miller

Miller said Ukraine must pay what it owes for gas.

“We cannot supply gas free either, because the debt must be paid. And 100 per cent of current shipments must be paid for,” he was quoted as telling journalists. “The situation with the debt cannot continue forever,” he said.

Miller said that the “contracts for gas supplies to Ukraine that are currently in force were signed in January 2009”.

“The main characteristics of the contracts that were signed – and that is a contract for Gazprom to supply gas to Ukrainian territory and for the transit of our gas through Ukrainian territory to Europe – they are contracts that are decades-long, long-term contracts, and the most important thing is that they were drawn up and signed on market principles,” Miller said.

“First and foremost, this pricing formula is a market pricing formula, market pricing and conditions, according to which the whole gas market operates, including the European one, that is the condition ‘take or pay’. On the one side, pricing risks are taken into account accordingly, on the other side, volume risks are taken into account. And correspondingly, pricing risks are the risks of the buyer, and volume risks are the risks of the supplier,” he said.

“The most interesting thing,” he went on, “is that now we see that the people who have come to power in Kiev are precisely those who took part in the preparation and signing of the contracts currently in force. In particular, Energy Minister Yuriy Prodan took a direct part in the delegation headed by [then Ukrainian prime minister] Yuliya Volodymyrivna Tymoshenko. He took part in the talks, we have a photo of the signing, and the completion of the talks about that famous event.”

“Yuriy Vasylyovych [Prodan] and I were talking just a couple of days ago, remembering that we had already met, we had already discussed gas cooperation, but a few years back, precisely when we were drawing up the current contracts,” he said.

Ukraine has no grounds for arbitration – Kupriyanov

Meanwhile, official Gazprom spokesman Sergey Kupriyanov has said that Ukraine’s statements that it intends to challenge the conditions of the 2009 gas contract in international arbitration are groundless. He was speaking in an interview on the programme “Vesti Nedeli” on official state Rossiya 1 TV (to be broadcast at 1600 gmt but already shown in the Far East), as reported by Interfax.

“The contract that is currently in force, and the price that has been announced, was signed in 2009 and has been in force all this time. Furthermore, [Ukraine’s state-owned oil and gas company] Naftohaz Ukrayiny executed this contract, and from the point of view of international trading practice, this means that it recognized it,” Kupriyanov was quoted as saying.

He also said that Prodan was directly involved in the gas talks in 2009.

“He (Yuriy Prodan – Interfax) knows full well about the agreements that were signed then. If something needed to be changed in this contract, then it should have been done earlier. Because we have worked on the basis of this contract for almost five years, and there were times when Ukraine paid properly,” he said.

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