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Today's paper. Last Updated: 06/01/2012

Moscow Will Restore Gas to Ukraine

Russia agreed to restore gas supplies to Ukraine on Thursday after Ukrainian officials promised to pay a huge debt, a top Russian gas industry official said.


Rem Vyakhirev, president of Russia's gas monopoly Gazprom, told a press conference that Russia would resume gas supplies at once after Ukrainian Deputy Prime Minister Valentin Landik promised him that Ukraine would pay a debt of 1.5 trillion rubles ($900 million), Reuters reported.


Vyakhirev gave no timetable for the payments but said government negotiations would resume on April 10. "If our relationships have not been normalized by then, the gas supply will be cut off completely," Reuters quoted him as saying.


Landik told the press conference, directly after the negotiations, that Ukraine will pay half of its debts for 1993 in cash and half in equipment for the gas industry. Ukraine would pay for its gas purchases in 1994 with cash, part in rubles and part in hard currency, he said.


By Friday, Landik said, Russia would try to supply not only the gas it had promised to send to Ukraine by contract but also part of the supplies Ukraine used to buy from Turkmenistan, which cut off supplies over lack of payment last month.


Interfax, quoting unnamed sources in Gazprom, said Ukraine also agreed, as partial payment, to grant Russia partial ownership of Ukrainian gas pipelines and storage facilities, but that the size of its share would be decided only at the next negotiating session in April, Interfax said.


While Ukraine had offered to pay with equipment, Russia had demanded majority shares in gas storage and distribution facilities in Ukraine, according to Interfax.


This would enable Russia to prevent Ukraine from illegally tapping Russian gas meant for export to Western Europe across its territory. Interfax quoted Gazprom officials as saying that Ukraine had already syphoned off 58 million cubic meters of gas meant for Western Europe.


The agreement gives Ukraine some breathing space after Russia last week sharply cut gas supplies to Ukraine in an attempt to force it to pay.


Interfax earlier on Thursday quoted a more pessimistic Gazprom official as saying that Ukraine had offered to pay only 300 billion rubles, less than 20 percent of the debt, and had not made any new proposals.


"Ukraine is just trying to drag out the negotiations to gain time," Interfax quoted the official as saying. By April, the cold weather will be over and gas consumption will be much lower, another official told Interfax.


Belarus, facing a similar cut in Russian gas supplies, has in recent weeks paid 120 billion rubles of the 535 billion rubles it owed for Russian gas supplies, Interfax reported. To finance the payments, the Belarussian government will confiscate hard currency and rubles from bank accounts of Belarussian enterprises that have not paid their gas bills, Interfax reported.


(Reuters, Interfax)




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