Ukraine Sees No Need for More Russian Gas as Paid Flows End

  • Ukraine's prepaid gas supply may end this week, Gazprom says
  • Ukraine says current stockpiles, imports from EU sufficient

Ukraine can cope without additional supplies of Russian natural gas through the end of the year and sees no need to prepay for more fuel until then, according to its energy minister.

The country’s underground stockpiles are sufficient, and fuel prices should fall further in the first quarter when a new supply deal with Russia is expected, Volodymyr Demchyshyn told reporters in Kiev. Money sent earlier may cover gas supplies for about two days -- “several days” at minimum consumption -- and then deliveries will stop if no additional prepayment is sent, Gazprom PJSC’s head Alexey Miller said in Tehran on Monday.

Ukraine’s gas consumption “is less than expected,” Demchyshyn said. “Therefore there is no critical need now to make any kind of prepayment.”

Ukraine, reliant on Russian gas for more than 20 percent of its needs, halted imports from Gazprom in July on a pricing dispute before resuming shipments in October to refill underground storage sites. Supplies restarted after the European Commission brokered an interim deal between the former Soviet allies. An international arbitration panel is to rule on their gas supply contract in mid-2016 at the earliest.

Eastern members of the European Union, which receives about 10 percent of its gas from Russia through Ukraine’s pipeline network, suffered shortfalls at least twice in the past decade during similar disputes.

Ukraine’s Demchyshyn said Monday that his nation is buying about 30 million cubic meters (1.1 billion cubic feet) of gas from the EU daily. Russia and Ukraine plan another EU-brokered deal by year-end, which will set a price level for the first quarter. An agreement is possible by Dec. 20, Interfax reported, citing Demchyshyn.

Russia sees Ukraine increasingly pumping from underground storage sites, “which can’t fail to concern” given the forthcoming freezing weather, Gazprom’s Miller said.

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