Discount for Naftogaz possible only by lowering export duty - Novak
BRUSSELS. March 3 (Interfax) - A discount on gas supplies for Naftogaz Ukrainy can be discussed, but would only be possible by means of lowering the export duty on Russian gas, as with the 'winter package' for Ukraine, Russian Energy Minister Alexander Novak told the Rossiya-24 TV channel.
Novak said specific prices for gas when the 'winter package' expires on April 1 were not discussed at yesterday's trilateral talks in Brussels.
He said Gazprom and Naftogaz had a contract "and the contract will still be valid after April 1."
He said Naftogaz had not yet enquired about a discount for gas after April 1 but that the possibility of a discount was written into the contract signed with Gazprom in 2009.
The contract contains a gas price formula that depends on oil and petroleum product prices. "We'll need to understand what the contract price will be as a whole as it depends much on oil and petroleum product prices. Prices have fallen, and the period that is used for calculation purposes coverts these lower oil and petroleum product prices," he said.
"So the price that emerges will depend during the second quarter on the results of the first quarter and previous months that are used to calculate the formula," he said.
"The size of the discount will depend largely on the current situation, on the market, on how competitive Russian gas is," he said.
"Theoretically there is that opportunity. If the consumer, Ukraine, makes the request, then the Russian government could consider this situation, given that the discount is not even on the price but is really a reduction and concession on the export duty," Novak said.
"So we will of course, be looking at the opportunity to grant this discount, going by the state of our budget and the market situation, how prices shape up for the period. And this will be a topic for separate negotiations and so on," he said.
Novak said Naftogaz Ukrainy currently owed Gazprom $2.4 billion, of which $2.2 billion was debt for gas supplied in 2014 and $200 million was fines.
"This debt has not yet been paid off and Naftogaz and Gazprom are in arbitration over this in Stockholm. There hasn't been one court session yet. We expect this might be possible by the end of the year, or that there'll be some steps related to the court ruling at the beginning of next year," he said.
Gazprom has said in a report that oral court proceedings on its claim for $4.5 billion in debt against Naftogaz are due to take place in February-March 2016, with an arbitration ruling to follow in June that year.
A counter claim by Naftogaz for $6 billion in possible excess payments for gas has been combined with the case.
The court is also considering a request by Gazprom to consolidate in the same process a Naftogaz claim of $6.2 billion related to a review of the transit contract.