Naftogaz Ukrainy says contractually can change annual gas buy
KYIV. Jan 12 (Interfax) - The existing gas contract between Russian gas giant Gazprom and Naftogaz Ukrainy from January 19, 2009 stipulates the possibility of changes to the annual volume of natural gas purchased, the national Ukrainian oil and gas company said in a statement issued Wednesday evening.
"Considering the high price for imported natural gas - notably it was around $400 [per thousand cubic meters] in the fourth quarter of 2011 including the discount envisioned in the Kharkyv agreements - the Ukrainian economy's need for this energy resource has significantly decreased in 2012," the statement said.
"In light of this, and in accordance with the provisions of the contract, and in the timeframes they stipulate, Naftogaz Ukrainy has sent Gazprom around ten letters requesting the coordination of natural gas deliveries to Ukraine in 2012 in the amount of 27 billion cubic meters, which the company undertakes to select and pay for as per the existing contract," the company said.
Earlier, during a Wednesday meeting with Russian President Dmitry Medvedev, Gazprom CEO Alexei Miller expressed concern over unilateral announcements by the gas giant's partners in Ukraine that the selection of supplied gas might be reduced. He noted that the contract with Ukraine is valid until 2019 and stipulates both "take or pay" terms and 52 billion cubic meters (bcm) of gas per year.
"Ukraine made such an announcement without having reached agreement with the Russian side, and we have made no such changes in the contract," Miller said.
Asked by Medvedev which measures the contract envisages to the case of a failure to select the indicated amount of gas, Miller said that Ukraine would still be obligated to pay. Under the existing contract, if changes in the amount of selected gas are made, adjusted supply volumes must be specified half a year in advance. "The Ukrainian side assumes that if it violates the terms of the contract, we will act in a civilized manner. But I think that if that happens, we will behave in a befitting manner," Miller said.
According to Fuel and Energy Dispatch Center (TsDU TEK), Ukraine imported 44.7 bcm of natural gas in 2011 - Naftogaz Ukrainy received 39.175 bcm and independent importer Ostchem Holding, which belongs to Ukrainian businessman Dmytro Firtash, imported 5.53 bcm of Turkmen gas.
Since the beginning of 2012, Ukraine has cut its selection of imported gas by almost 67%. Whereas at the end of 2011 daily selection was 100-110 million m3, it has fallen steadily since the beginning of January of this year. By Monday, January 9, it had fallen to 33.3 million m3. Ostchem's purchases fell the most sharply - by almost 83% - from 23 million to a mere 4 million m3 per day.