When will Ukraine repay its gas debt?

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Ukraine is not ready to fully ensure the transit of Russian gas to the European Union. That’s what Russian Energy Minister Alexander Novak said in his comments on the results of recent trilateral talks in Warsaw. Despite repeated violations by Kiev of its gas contract with Russia’s Gazprom, the Russian side has honored its obligations in full, he said.

What’s more, Gazprom has paid Ukraine for gas transit in advance to finance Kiev’s future purchases of the so-called technical gas for storage, which is necessary to ensure smooth transit to Europe. But Kiev has been busy with other things it evidently deems more important than pumping gas into its underground terminals.

Asked when Kiev would repay its $3.5-billion gas debt to Russia, Ukrainian Energy Minister Yuri Prodan just shrugged his shoulders. Nor was he any more explicit about what had happened to the gas reserves intended for Europe. True, he confirmed that the 2009 gas contract was still in force, yet, stopped short of giving any guarantees as far as gas transit to Europe is concerned.

“During our consultations, Mr. Prodan made it precisely clear that Ukraine could not guarantee the pumping of the necessary amount of gas into its underground gas terminals. So, naturally, Ukraine does not guarantee that gas will reach European consumers to the amount stipulated by contracts between Gazprom and European consumers. Both Ukraine and our European partners, which are also an interested party and which today also share responsibility for ensuring the necessary transit supplies through Ukraine, should take urgent steps,” Novak said.

Russia no longer intends to sponsor the Ukrainian economy. Kiev has until May 7 to repay its debts or be required to make advance payments for the gas it will import.

“In April, Ukraine imported $1.26 billion worth of gas, according to preliminary estimates. Thus, its debt for the imported Russian gas currently totals around $3.5 billion. The European Commission knows the figures… Mr. Oettinger [EU Energy Commissioner Guenter Oettinger] confirmed the existence of the debt and urged the Ukrainian side to address the issue,” the Russian minister said.

Russia has warned that if Kiev fails to pay, it might try to steal gas from the pipe. The risk remains high. But there is an alternative risk-free solution – construction of the South Stream gas pipeline from the Russian port of Novorosiisk to the Balkans via the Black Sea.

The next round of gas talks between Russia, the EU and Ukraine has been scheduled for the middle of May.

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