Ukraine, Gazprom agree to cancel take-or-pay provisions - source
KYIV. Dec 18 (Interfax) - Top management officials at Naftogaz Ukrainy have reached agreement with their counterparts at Russian Gazprom to remove take-or-pay provisions from their gas supply agreement, a source familiar with the matter told Interfax.
Interfax was unable to obtain official confirmation of the information. Gazprom declined to comment.
The supplement retains the stipulation that Gazprom sell the gas directly to Naftogaz, without intermediaries.
Under the supplement, signed on December 17 and announced by Deputy Prime Minister Yuriy Boyko on Ukrainian television, Naftogaz and Gazprom will sign endorsements each quarter next year, affirming the price of natural gas at $268.5 per 1,000 cubic meters.
If the endorsements are signed on time (by the 10th day of the first month of the quarter), the price of gas calculated under the existing contract will be adjusted by a coefficient (depending on the market price of oil and product) to $268.5 per 1,000 cubic meters. It will not be adjusted for the heat value of the gas delivered.
If for any reason the quarterly endorsement is not signed by the deadline, the price Ukraine pays for gas will be determined using the existing formula and taking into account the heat value of the gas.
"All other terms of the contract remain unaltered and binding on the parties," the December 17 supplement says.
The supplement, which amends the January 19, 2009 contract on gas supplies in 2009-2019, lowers the price Ukraine pays for gas to $268.5 per 1,000 cubic meters from over $400 currently.