Ukraine Pays Gazprom $378 Million to Resume Gas Shipment

Ukraine said it transferred $378 million to Russia as an upfront payment for natural gas, money that should allow shipments interrupted for the past five months to resume.

NAK Naftogaz Ukrainy sent OAO Gazprom the money for 1 billion cubic meters, previously scheduled for import this month, the Ukrainian energy company said in an e-mailed statement today. Gazprom Chief Executive Officer Alexey Miller said on Oct. 31 that gas shipments to Ukraine would resume within 48 hours upon receipt of payment. Sergei Kupriyanov, a spokesman for Gazprom, had no immediate comment when reached by phone today.

Once Ukraine’s main gas supplier, Russia stopped deliveries June 16 over a price and debt dispute after the countries’ relations soured over annexation of Crimea and unrest in eastern Ukraine. The European Union, which relies on Russian gas piped through Ukraine for 15 percent of its needs, brokered an interim deal between the states in October to resume supplies and avoid shortages seen in 2006 and 2009.

“Russian gas paid for today cuts the risk of shortages in Ukraine and in Europe-bound transit at least until the middle of February,” said Alexander Paraschiy, an analyst at Concorde Capital in Kiev. The country may need 3 billion to 4 billion cubic meters of gas from Gazprom at cost of as much as $1.5 billion starting in January to last through the heating season given rising demand and problems with coal, Paraschiy said by phone.

The payment deal, which set a fixed discount and debt-restructuring conditions, covers Gazprom deliveries through March. Ukraine agreed to pay out $3.1 billion of its gas debt by the end of the year, transferring a first installment of $1.45 billion last month.

Ukraine has been cutting gas consumption, boosting imports from the EU and using fuel from its underground storage sites to cope without Russian fuel.

Supplies could be halted again on Jan. 1 if Ukraine doesn’t pay out the agreed debt, Russian Energy Minister Alexander Novak said in October.