Head of Naftogaz: Ukraine is mandated to buy Russian gas

The purchase of Russian gas is beneficial from the point of view of commercial logic, since the court set the price of gas purchases below European market value, stated Andriy Kobolyev, the chairman of the board of Naftogaz of Ukraine on Channel 5 TV.

Kobolyev said, “We have completely annulled $56 billion and this cancellation was not for nothing. The court believes that the contract still exists. Half of the import needs is exactly the balance between Russia and Europe with the line between the two being drawn by the court. In addition, such a deal was tailor made for us, setting the price below the European one. From a business point of view, denying the implementation of such a decision would be equivalent to shooting ourselves in the foot.”

He explained that now Ukraine needs to purchase 10 billion cubic meters of gas a year. The tribunal also decided that the minimum volume of Russian gas purchases should not exceed half of Ukraine's annual needs.

Kobolyev added, "As for our obligations, the minimum amount that we need to take under the new contract is 4 billion cubic meters. The price is lower than the European price... From the point of view of commercial logic, as execution of the decision of the tribunal, it is mandatory. Also, obtaining a cheaper gas resource, which we so often speak of and demand... this acquisition decision is both logical and mandatory."
At the same time, the head of Naftogaz said that public gas prices may decrease if the state increases its own production.

Earlier, it was reported that this year, Naftogaz would purchase about 4-5 billion cubic meters of gas from Russia and would continue to import from European sources. Naftogaz has not delivered Russian gas to Ukraine since 2015, when the Stockholm Arbitration decision dictated that Ukraine must resume deliveries of the minimum volumes of gas from Russia in accordance with the “take or pay” contract.

Previously, Ukrainian President Peter Poroshenko stated that Ukraine will be ready to resume the purchase of natural gas from Russia only if prices are cheaper and if transparent agreements are signed.

Naftogaz claims that new prices for Russian gas would be at the same level as German market value.

  Naftogaz, Russian gas, Ukraine

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