Gazprom: Ukraine Missed Payment Deadline as IMF Sends Aid

OAO Gazprom, Russia’s natural gas exporter, said Ukraine failed to meet its deadline to pay for April supplies as the crisis-torn country begins receiving cash from an international bailout package.

Ukraine’s overdue debt climbed to $3.51 billion, including the bill for last month, Gazprom spokesman Sergey Kupriyanov said by e-mail. State-owned NAK Naftogaz Ukrainy declined to comment. The International Monetary Fund provided Ukraine $3.2 billion under a $17 billion bailout accord yesterday.

Tensions in Ukraine have escalated into deadly clashes as the government seeks to reassert control over its easternmost regions. Europe imports about 30 percent of its gas from Russia, half of which crosses Ukraine, making the nation a linchpin in the continent’s energy security. Russian President Vladimir Putin has threatened to move Ukraine to prepayments for gas if it doesn’t start settling its debt.

Gazprom raised the price it charges Ukraine by 81 percent on April 1, to a level higher than for any EU member. The government in Kiev has refused to accept the move. Prior price disputes between Russian and Ukraine led to disrupted gas flows to Europe during freezing weather in 2006 and 2009.

Ukraine will get an advance payment notice on May 16 if it hasn’t reduced its overdue debt, Russian Energy Minister Alexander Novak said after energy talks with Ukraine and the European Union in Warsaw on May 2. Failure to pay for June supplies by May 31 may lead Gazprom to curb deliveries, he said, echoing Putin’s warning.

Agreement Sought

Ukraine is prepared to pay the debt in 10 days following an agreement by Gazprom to amend the contract to return to the previous price of $268 per 1,000 cubic meters, Interfax reported today, citing Ukrainian Prime Minister Arseniy Yatsenyuk.

Olga Golant, a spokeswoman for the Russian Energy Ministry, said any comments and information about whether the payment has been made will be available tomorrow.

Ukraine, which aims to limit its dependence on Russian gas, is seeking an “honest, market price” for it, Ukrainian Energy Minister Yuri Prodan said on May 2. Gazprom raised the price to $485 per 1,000 cubic meters after Russia ended all discounts in place.

Russia will consider offering Ukraine a discount during the second round of talks, which may take place from May 16 to May 19, as long as Ukraine pays its gas debt, Izvestia reported today, citing an unidentified government official. Gazprom’s Kupriyanov declined to comment.

Gas Talks

A meeting on a lower level will be held in Brussels on May 12 to prepare for the second round of trilateral negotiations, Golant said by telephone today. The date hasn’t yet been set, she said.

Ukraine may receive $13.7 billion this year from both the IMF and international donors, the Finance Ministry in Kiev said today in a statement. The IMF funds will go to government and the central bank, it said.

“The program is designed so that financial assistance basically allows Ukraine’s government to repay its arrears and stay current on its obligations,” the IMF’s Ukraine office head Jerome Vacher said in Kiev today.

Before it's here, it's on the Bloomberg Terminal.
LEARN MORE