Terms of Russian natural gas supply to Ukraine regulated by existing contract

A working meeting between Dmitry Medvedev, Russian Prime Minister and Alexey Miller, Chairman of the Gazprom Management Committee took place today.

Meeting between Dmitry Medvedev and Alexey Miller held
Meeting between Dmitry Medvedev and Alexey Miller held

Dmitry Medvedev and Alexey Miller. Photo from government.ru

The meeting looked at the passing of the autumn-winter period. Alexey Miller reported that Gazprom had steadily supplied Russian and foreign consumers with gas in winter.

Special attention was paid to Russian gas supply to Ukraine. It was pointed out that on March 31 the ‘winter package’ and, accordingly, the gas discount of USD 100 per 1 thousand cubic meters were expiring. The issue of granting a discount falls within the competence of the Russian Government. All the other terms and conditions of gas supply to Ukraine are totally regulated by the existing contract between Gazprom and Naftogaz of Ukraine and addenda to it. There is no need to amend these documents in order to supply gas to Ukraine starting from April 1.

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Verbatim transcript

Dmitry Medvedev: We’ve just discussed our draft energy strategy with you – much remains to be done there. What is the general situation with passing the autumn-winter period in Russia, Mr. Miller?

Alexey Miller: The autumn-winter period is almost over. As for gas supplies to consumers, they were carried out on a regular basis. There were no failures in gas supply to Russian or foreign consumers during this autumn-winter period.

Dmitry Medvedev: That is good. But we have a difficult partner – it’s clear that I’m referring to Ukraine. I’d like to remind you that on March 31 the so-called special winter discount (or a winter discount package) expires; it was granted to the Ukrainian party on its demand after all sorts of consultations involving, among others, our partners from the European Union. What are we going to do next?

Alexey Miller: Mr. Medvedev, the winter package expires on March 31 and, accordingly, on March 31 the one hundred dollar discount on gas supply to Ukraine expires as well. As for the contract terms and conditions, it is the only outstanding issue in relations between Gazprom and Naftogaz of Ukraine.

All the other issues are fully regulated by the existing contract signed in 2009 and all the addenda to it, including those signed after reaching the agreements on the winter package in late October 2014. It concerns working on a pre-paid basis, when Ukraine pays in advance, and only after Gazprom receives the money, we supply gas to Ukraine. So, today all the supply conditions are determined by our contract obligations and there is no need to amend the existing contracts and addenda in order to supply gas to Ukraine starting from April 1. Only the issue of granting a discount remains, but it is for the Russian Government to decide and outside Gazprom’s competence.

Dmitry Medvedev: Here is what I would like to say on the matter. It is evident that from time to time the Ukrainian party comes out demanding price revision or introducing some other mechanisms. There is no doubt that Gazprom should fully adhere to the existing contracts, and it has no legal alternatives. Any other talks on the matter are unfounded, they just represent the wishes or political self-promotion of certain individuals in Ukraine.

As for the discount, it is true that it is granted by the Government, it is our good will. It may be offered only in the amount equal to our export duty, or, putting it straight, not exceeding this export duty: it may be less, I suppose, but it can’t be more. That is why, there can be nothing new about it, but this issue has to be finally settled with our Energy Minister, their Minister and all the interested parties; after that the Government will make a decision, I will compose a final statement and sign it.

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