4 Sep 2009 12:47

Naftogaz announces full payment for Russian gas imported in August

KYIV. Sept 4 (Interfax) - Ukrainian national oil and gas company Naftogaz Ukrainy says that it has paid for gas delivered by Gazprom in August on time and in full.

"Payment for August has been made in full," Naftogaz spokesman Valentin Zemlyansky said. He did not provide other details.

Acting Finance Minister Ihor Umansky said the day before that Naftogaz would have to pay $667 million for the August deliveries compared with the $605 million Prime Minister Yulia Tymoshenko has said Naftogaz paid for gas supplied by Gazprom in July.

Naftogaz has said the July and August gas supply volumes were roughly identical at approximately 3.3 billion cubic meters.

The gas contracts signed in January 2009 and running to 2019 include take-or-pay provisions requiring Naftogaz to purchase at least 80% of the contracted amount for the year. Under those provisions, Naftogaz would have to purchase a minimum of 32 bcm this year and 41.6 bcm next year.

Throughout the first half of the year Naftogaz purchased less than the amount stipulated in the contract. It was to have purchased 5 bcm in the first quarter, 10 bcm in the second, 12 bcm in the third and 12.5 in the fourth. In fact, Naftogaz purchased just 2.8 bcm in the first quarter and about 5.7 bcm in the second.

That history formally gives Gazprom the right to seek penalties from Naftogaz that President Viktor Yushchenko has estimated could total $5.25 billion. But so far, the Russian gas giant has refrained from doing that.

Naftogaz has been purchasing about 3.3 bcm of gas a month in the third quarter. In order to meet contract provisions, it would have to purchase 16.9 bcm in the remaining four months or about 4.2 bcm a month.

Analysts say that Naftogaz is shifting the bulk of its purchases to the second half of the year in anticipation of lower prices. It paid $360 per 1,000 cubic meters in the first quarter, $271 in the second and $198 in the third. The price of gas in the fourth quarter is expected to decline slightly from the third quarter level or remain unchanged.