Naftogaz breaks with Gazprom

Naftogaz of Ukraine has no plans to resume purchasing gas from PJSC Gazprom after April 1, 2016, because the price of gas offered by the Russian company for the second quarter of 2016 is higher price than what is offered to Naftogaz by European suppliers, the press service of the Ukrainian company stated.

It was reported that Gazprom has refused to extend their “winter package” agreement with Naftogaz, that defined the transition conditions for the purchase of Russian gas for Ukraine.

Naftogaz stressed that the Ukrainian company is still open to negotiations on conditions for purchasing Russian gas to get them closer to the market ones. The transportation of Russian gas to European consumers will be continued uninterrupted, in accordance with the corresponding law and the terms of the contract between the parties.

In December of 2015, NJSC Naftogaz of Ukraine refused to buy Russian gas, thus showing that the Ukraine can manage without Russian gas even under extremely cold weather conditions, ZN.UA reported.

Earlier it was reported that the European Commission is ready to be a mediator in talks between Ukraine and Russia, which, according to European Commissioner Maroš Šefčovič, should take place "before the end of the heating season," which means, before the end of March. Brussels urged Moscow and Kiev "to start preparing for the next autumn-winter season", as soon as possible, in order "to find interim solutions."

At the meeting, Ukraine was planning to discuss the entire package of gas issues, including the transit of Russian gas to Ukraine and its procurement.

The last trilateral meeting of the Ukraine-EU-Russian Federation was held in Brussels at the end of September 2015. That's when the second "winter package" was signed, in which the Russian Federation had reduced the price to $212 per thousand cubic meters. This agreement ended on April 1st.

Within the framework of these agreements the additional agreement between Naftogaz and Gazprom was also signed. Ukraine bought about 2.5 billion cubic meters of gas directly from Russia. Since November 25th, purchases of gas were suspended. Ukraine hasn't imported gas from Russia for the last 125 days. Naftogaz is not intending to resume the purchases until the price of Gazprom's gas for Ukraine is less than the price of the 'reverse flow' gas. After the expiration of the "discount", it will become even more expensive.

  Ukraine, Russia, Europe, Naftogaz of Ukraine, Gazprom