Citing a preliminary bill, Moscow pressed ahead with its demand that
Ukraine pay for June deliveries early next month, heightening a
dispute over price that is pushing the two countries closer to
another gas war that could cut supplies.
Previous disputes over gas have left Europe, which gets around a
third of its gas needs from Russia, with limited supplies at the
height of winter, spurring it to look for alternative producers. But
so far it has been unable to break its dependence on Moscow.
State-controlled Gazprom said the bill was based on Ukraine taking
up a contractual amount of 114 million cubic meters per day, or 3.4
billion cubic meters for the month in total.
"Taking into account non-working days, Naftogaz should pay this bill
by June 2 and, starting from June 3, the company will be getting gas
... only at the volumes paid for," spokesman Sergei Kupriyanov said
in a statement.
This means that Ukraine needs to pay $1.658 billion for June's gas
deliveries based on a price of $485 per 1,000 cubic meters, he
Naftogaz confirmed it had received the bill but declined to comment
Ukraine wants to change the conditions of a 2009 contract that
locked Kiev into buying a set volume, whether it needs it or not, at
$485 per 1,000 cubic meters - the highest price paid by any client
Moscow dropped the price to $268.5 after then-President Viktor
Yanukovich turned his back on a trade and association agreement with
the European Union last year but reinstated the original price after
Yanukovich was ousted in February.
Kiev has so far refused to pay the higher price, saying gas is being
used as a political tool by Moscow to punish Ukraine's new leaders
for moving closer to the European Union.
In an interview with Reuters last week, Ukrainian Energy Minister
Yuri Prodan called $268.5 per 1,000 cubic meters "a market and a
fair" price for gas, which Kiev is able to pay.
He said Kiev would take Gazprom to court if the two sides failed to
agree on price by May 28, a procedure used by Gazprom's other
clients in Europe to win price cuts over the last couple of years.
"Though Gazprom has many times threatened to introduce pre-payment
to Ukraine, this latest announcement will likely further amplify the
risk of possible trouble with stable gas transit to Europe," Alfa
Bank said in a note on Tuesday.
A LACK OF GAS IN STORAGE
Vitaly Markelov, a Gazprom deputy chief executive, said earlier on
Tuesday that Ukraine lacked around half of the gas needed in storage
to avoid problems in winter.
"According to our colleagues (in Ukraine), 9 bcm is in storage. To
pass through autumn and winter periods normally, we estimate that
(Ukraine) needs around 18.5 bcm (in total)," Markelov told a news
[to top of second column]
Twice in the past decade, price disputes have led to reduced
supplies of Russian gas to European clients via Ukraine, a conduit
for about half the gas Europe imports from Russia.
Ukraine received the first tranche of about $3.2 billion from a $17
billion two-year aid program from the International Monetary Fund
last week, which Moscow hopes Kiev will use to cover gas debts.
Anatoly Yanovsky, Russia's deputy energy minister, said on Monday
Moscow would be ready to continue talks with Kiev on gas only after
Kiev paid off its debt.
A Gazprom representative said on Tuesday gas flows to Europe via
Ukraine remained stable.
The worst East-West standoff since the Cold War over Ukraine has
spurred efforts to try to reduce Russia and Europe's energy
interdependence. Europe is scrambling to diversify supplies and,
faced with Western sanctions, President Vladimir Putin has looked to
the east for new export markets.
Putin plans to visit China on May 20 and Gazprom hopes to sign a gas
contract after years of talks to supply Beijing with 38 bcm per year
- volumes comparable to deliveries to Germany, its biggest gas
Yanovsky said the gas contract was "98 percent" ready. Sources told
Reuters last month Gazprom was hoping China would agree a price of
$10-$11 per mmBtu (million British thermal units).
China is believed to pay $9 per mmBtu to Turkmenistan, the Central
Asian state that beat Gazprom to the Chinese market.
Asked if Gazprom was considering inviting Chinese companies to
develop its fields, an offer which could help spur moves to seal the
contract, Markelov said: "We are not looking at such cooperation."
(Reporting by Katya Golubkova and Denis Pinchuk, additional
reporting by Pavel Politiyuk in Kiev; editing by Elizabeth Piper and
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