Naftogaz, Gazprom Formalize Gas Agreements

November 26, 2009

Naftogaz Ukrainy and Gazprom have formalized gas agreements, a Gazprom source told Itar-Tass on Tuesday, following negotiations of Naftogaz CEO Oleg Dubina and Gazprom CEO Alexei Miller.

“In keeping with the agreements between the Russian and Ukrainian prime ministers, the sides signed supplements to the gas contract of January 19, 2009. The supplements set the amount of gas, which will be delivered in 2010, at 33.75 billion cubic meters, and say that no fines will be levied for Naftogaz’s taking less gas than required by contract in 2009,” he said.

Naftogaz and Gazprom signed two contracts on January 19, 2009. One was about gas delivery in 2009-2019, and the other about gas transit in the same period.

The contract provides the switch to European standards in gas pricing and transit charging in 2010.

The sides agreed on 20% discount from the European gas pricing formula in 2009 and said that each quarter the price would be amended with due account of fuel oil and gas oil prices.

Ukraine pledges to retain the gas transit charge of $1.7 per 1,000 cubic meters of gas carried to 100 kilometers in 2009.

The take-or-pay principle was applied to 80% of the supplied gas.

Yet the financial and economic slowdown cut gas consumption in Ukraine. The country bought only 18.85 billion cubic meters of gas instead of 31.7 billion planned, Prime Tass said.

Copyright 2009. Itar Tass. All rights reserved.