Settlements of Ukraine’s debt for natural gas deliveries between 1997 and 2000

On August 10 and 11, Gazprom, Vnesheconombank an Naftogaz of the Ukraine signed a package of documents on full and final settlement of the Ukraine’s debt to Gazprom for natural gas deliveries between 1997 and 2000.

The documents signed supplement the agreements on cooperation in natural gas supply and transit to 2028, reached in the course of the meeting on 29 July 2004 between Alexey Miller, Gazprom’s Management Committee Chairman and Yuri Boiko, Chairman of the Board of Naftogaz of the Ukraine.

Simultaneously, Gazprom and Vnesheconombank entered into an Agreement stipulating assignment of USD 1.62 billion of the Ukraine’s debt to Vnesheconombank, which, on its part, fully settled all the accounts with Gazprom.

Gazprom also made a single advance payment of USD 1.25 billion to Naftogaz of the Ukraine as payment for the transit of 19.2 bcm of gas via the Ukraine over 2005 to 2009.

Said advance payment will make it possible to fix USD 1.09/1,000cm/100km as a gas transmission tariff between 2005 and 2009.

The documents signed also prescribe gradual shortage of gas being piped by Gazprom to the Ukraine as settlement of gas transit. This move will enable Gazprom to export spare gas to outside the former Soviet Union and sell it at a higher price.


On 4 October 2001, the Government of the Russian Federation and the Cabinet of Ministers of the Ukraine signed the Inter-Governmental Agreement on additional measures aimed at ensuring Russian gas transit via the Ukraine. The Agreement stipulates settlement of USD 1,437 billion of the Ukraine’s debt for gas deliveries. Under the Paper, issueing Naftogaz of the Ukraine’s ordinary corporate bonds could have been one of the options to clear the arrears. However, the Russian side considered this move as unoptimal. As a result, Gazprom adopted a decision to search for alternative ways of settling the Ukraine’s debt.

On 29 July 2004, Gazprom’s Headquarters hosted a signing ceremony of a set of documents, under which the new RosUkrEnergo company was founded. RosUkrEnergo’s stake was split in equal portions among Gazprombank and Raiffeisenbank. The joint venture will basically focus on transmitting gas purchased in Turkmenistan to the Ukrainian market. RosUkrEnergo will start operating starting 1 January 2005 based on the following documentation:

  • the Agreements on Turkmen gas procurement, concluded with Naftogaz of the Ukraine (over 2005 to 2006) and Gazexport (for 2005 and onwards, with gas amount to be gradually increased);
  • the Agreement with Gazprom on gas transmission via Uzbekistan, Kazakhstan and Russia;
  • the Agreement with Naftogaz of the Ukraine on sales of gas delivered to the Russian-Ukrainian border.

Overall gas supplies will be increased from 44 bcm in 2005 to 60 bcm, over 2007 to 2028.

Information Directorate, OAO Gazprom

Related news