Ukraine makes payment for Russian gas as winter arrives

Ukraine has sent $378.22 million to Russia as advance payment for natural gas supplies. The payments and the flow of gas come just in time, as wintry weather settles on Ukraine.

|
AP Photo/Sergei Chuzavkov/File
Gas pipeline station workers walk past the gas pressure engines in Zakarpattia region, Western Ukraine.

Ukraine’s Naftogaz has sent $378.22 million to Russia as advance payment for natural gas supplies, which should lead to the resumption of shipments that were suspended nearly six months ago in a dispute over the prices Moscow had set for the fuel and debts Kiev owed for previous shipments.

Russia’s Gazprom said Dec. 7 that it had received the payment, which had been made the day before. Under an agreement signed between the two government-owned gas companies, the flow of gas was to resume within 48 hours after payment. 

The payments and the flow of gas come just in time, as wintry weather settles on Ukraine. It also is good news for Russia’s gas customers in the European Union, Alexander Paraschiy, an energy analyst at Concorde Capital in Kiev, told Bloomberg News. “Russian gas paid for [now] cuts the risk of shortages in Ukraine and in Europe-bound transit at least until the middle of February,” he said.(Related: South Stream Pipeline May Not Be Dead Yet)

Vladimir Demchishin, Ukraine’s minister of energy and coal industry, said Dec. 5 that the payment would buy about 1 billion cubic meters of gas. His predecessor, Yuri Prodan, said earlier in December that the amount would depend on weather and demand. Under the Gazprom-Naftogaz contract, Ukraine can decide at any time on the amount of gas it needs for a given period, as long as it pays in advance.

But that’s just the first installment. Paraschiy said that, for now, the country can’t rely much on coal because of the pro-Russian violence in Ukraine’s eastern coal region, and estimated that Ukraine may need as much as 4 billion more cubic meters of Russian gas, costing up to $1.5 billion, starting in January to keep warm through the winter.

Having gone six months without Russian gas, Ukraine has been strictly limiting its consumption of gas from its reserves and increasing its imports from EU countries. Still, Russia could suspend deliveries again if Ukraine’s doesn't maintain payments on its $5 billion debt for past gas deliveries by Jan. 1, according to Russian Energy Minister Alexander Novak.

 

In October, under EU mediation, Kiev accepted an offer by Moscow to supply gas to Ukraine until March 2015. Ukraine also must pay Russia $3.1 billion of its outstanding debt of more than $4 billion by the end of 2014. The first installment of that debt repayment was made in November.(Related: Ukraine’s Next Energy Minister Will Be Bought and Paid For, As Usual)

If Ukraine continues to stay current on its payments, Europe can rest easy, at least for the coming winter. EU customers get about one-third of their gas supplies from Russia, and half of that flows through pipelines in Ukraine. That’s a key reason that the EU mediated the payment deal.

Russia cut gas deliveries to Ukraine on June 16 against the backdrop of the popular overthrow of pro-Russian Ukrainian President Viktor Yanukovich in February, Russia’s annexation of Ukraine’s Crimean peninsula in March, and the growing fighting between Ukrainian forces and pro-Russian separatists in eastern Ukraine.

Disputes between the two countries had previously led Russia to suspended gas deliveries in 2006 and 2009. In both of those cases, Russian gas deliveries to the EU were affected.

By Andy Tully of Oilprice.com

More Top Reads From Oilprice.com:

Source: http://oilprice.com/Latest-Energy-News/World-News/Ukraine-Sends-Russia-Huge-Advance-Payment-For-Gas.html

You've read  of  free articles. Subscribe to continue.
Real news can be honest, hopeful, credible, constructive.
What is the Monitor difference? Tackling the tough headlines – with humanity. Listening to sources – with respect. Seeing the story that others are missing by reporting what so often gets overlooked: the values that connect us. That’s Monitor reporting – news that changes how you see the world.

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.

QR Code to Ukraine makes payment for Russian gas as winter arrives
Read this article in
https://www.csmonitor.com/Environment/Energy-Voices/2014/1209/Ukraine-makes-payment-for-Russian-gas-as-winter-arrives
QR Code to Subscription page
Start your subscription today
https://www.csmonitor.com/subscribe