Gazprom has written off 4.5 billion cubic meters of gas that it was unable to deliver to European clients in January 2009 because of a conflict with Ukraine, costing the state-run company about $1 billion.
Although Gazprom maintains that it has no obligations to Europe for the undelivered gas because of a force majeure, the company reduced its clients' obligations under their take-or-pay contracts by exactly the amount that was not delivered.
The decision was "in accordance with the contract terms," according to documents prepared for a Gazprom board of directors meeting Tuesday, two sources close to the company said.
Neither the sources nor Gazprom would say what terms allowed the company to write off so much gas. A spokesperson said only that Gazprom's position had not changed: Ukraine is to blame for the gas blockade, it was a force majeure for Gazprom and therefore its European clients cannot demand compensation.
It remains unclear who is to blame for the disruption. On Jan. 1, 2009, Ukraine's gas supply contract expired and they stopped receiving supplies, but gas continued flowing to Europe. Over the next week, Naftogaz Ukrainy took 86 million cubic meters of gas from the transit system, saying it was needed for pumping. Gazprom accused Ukraine of stealing "unprecedented volumes" of gas, and all transit stopped Jan. 7.
Naftogaz said Russia turned off the taps, while Prime Minister Vladimir Putin said Ukraine stopped sending gas to Europe first. As a result, 18 countries suffered and gas supplies only resumed Jan. 20.
No one said anything about suing Gazprom, but the company nonetheless ended up losing some revenue. The average gas price for exports to Europe was $290 per 1,000 cubic meters in 2009, or $1.3 billion for 4.5 bcm. By not taking the gas, Gazprom's clients would have been required to pay 75 percent to 80 percent of the sum as an advance for future deliveries in January and February 2010. That would mean that Gazprom is losing about $1 billion.
Gazprom has not disclosed the volume of gas that Europe was supposed to purchase under its take-or-pay contracts last year. The sources close to Gazprom said 7 bcm to 8 bcm remained unused in addition to the 4.5 bcm written off (actual deliveries for the year were 140.2 bcm, or 12.3 percent less than in 2008).
If not for the conflict with Ukraine, Gazprom would have been able to collect a record $3 billion advance for last year's unused gas.
Vedomosti's sources declined to specify who benefited most from the write-offs. Slovakia and the Balkan countries were the worst hit, and Vedomosti was unable to reach their importers for comment Monday. Spokespeople for E.On Ruhrgas, GdF and Eni declined comment.
Gazprom is planning record deliveries to Europe this year, but some of the contracts were "modified," deputy chief Alexander Medvedev said Thursday. Details have not been disclosed, but the board meeting materials mention a possible decrease in the minimum supplies — "with a corresponding increase in the following years."