Russia could restart gas supplies to Ukraine as soon as next week, if all financial conditions are met, Gazprom chief executive Alexei Miller said yesterday, as UK gas prices plunged on news of the deal.
Moscow, Kiev and the EU on Thursday clinched a deal that would resume supplies of Russian gas to Ukraine over the winter in return for payments funded in part by the Ukrainian government’s Western backers.
British wholesale gas prices for next month and December yesterday fell to their lowest-ever levels after the deal was signed.
Photo: EPA
The contract for delivery next month was trading at ￡0.521 (US$0.83) per therm at 07:58AM down 1.7 percent from the previous settlement, but it had earlier touched ￡0.52 per therm, its lowest level since the contract began trading.
The December contract was trading at ￡0.546 per therm, also down 1.7 percent, but touched its lowest-ever level of ￡0.544 in earlier trade.
Gazprom halted supplies to Ukraine in June amid renewed disputes over debts and pricing between Moscow and the former Soviet republic that is now seeking to foster closer ties with the West rather than with Russia.
Ukraine is also struggling with a pro-Russia rebellion threatening to split its eastern regions and blames Moscow for fanning the unrest.
Miller said Gazprom would restart supplies to Ukraine after Kiev covers part of its debt for past gas deliveries and provides a prepayment for supplies that would reach it next month.
“Everything depends on when Ukraine makes this payment. We understand this can happen by the end of next week,” Miller told state TV broadcaster Rossiya 24 in an interview, when asked about possible timing for resuming supplies.
Miller said Ukraine must provide US$1.45 billion to cover for part of gas debt and pay US$760 million up front for November supplies before supplies resume.
By the end of the year, Kiev must pay a total of US$3.1 billion in gas debts for past deliveries, the executive added.
The deal struck in Brussels on Thursday allows Kiev to use some resources under its existing accords with the EU and the IMF to fund the prepayment. Kiev says it has resources put aside to cover past debts to Gazprom.
Under the Thursday agreement, Ukraine would buy gas for the rest of this year at US$378 per 1,000m3 and at US$365 in the first quarter of next year.
Russia says that amounts to a US$100 discount off its previous agreements with Ukraine.
Miller said he expected the Russian government to formally approve the rate today.
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