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OIL AND GAS
No justification for gas bill, Ukraine's Naftogaz says
by Daniel J. Graeber
Kiev, Ukraine (UPI) May 2, 2013


disclaimer: image is for illustration purposes only

Ukrainian energy company Naftogaz said its contract with Russia's Gazprom says nothing about paying for unused natural gas.

Gazprom last week sent Ukraine an $11.4 billion bill for unused natural gas in 2013 covered under a take-or-pay mechanism in its bilateral contract.

Naftogaz said Thursday, however, it doesn't recognize the debt owed for unused gas.

"The contract between Naftogaz of Ukraine and Gazprom does not contain a mechanism for enforcing this clause," the company said.

Gazprom in 2009 suspended gas supplies through Ukraine because of similar contractual rows. The deal that ended the impasse saddled Ukraine with some of the highest gas bills in the region.

Ukrainian Prime Minister Arseniy Yatsenyuk said he's ready to pay $268 per 1,000 cubic meters, the standard purchase volume, which is about 45 percent less than the established price.

"We have come to agreement on a trilateral meeting between Ukraine, the European Union and Russia to settle the gas conflict," he said.

Last month, Russian President Vladimir Putin warned European energy security was at risk because of the conflict over Ukraine. Europe gets about a quarter of its natural gas from Russia, though most of that runs through the Soviet-era transit network in Ukraine.

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