Gazprom may stop deliveries of gas to Ukraine in June

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Russia’s energy giant Gazprom said Friday it will stop deliveries of natural gas to Ukraine if Kiev fails to pre-pay by June 2. According to Gazprom, Ukraine’s accumulated debt for previous deliveries totals $3.5 billion. Russia has said it will switch to advance payments in its gas supplies for Ukraine starting from June. “The Ukrainian side must pay for June deliveries by June 2,” Gazprom CEO Alexei Miller said at a meeting with Russian Prime Minister Dmitry Medvedev.

If Ukraine fails to pay for June deliveries, Gazprom will cut off gas supplies from June 3, Miller said. Russia’s state-owned Gazprom earlier said Moscow’s conflict with the coup-imposed authority in Kiev could potentially hamper Russian natural gas deliveries to Europe through Ukraine. The company said it feared Ukraine’s Naftogas could fail on its transport obligations, withholding some gas allocated for Europe for itself.

On April 1, the price of Russian gas for Ukraine rose to $485 per thousand cubic meters from $268.50, as Russia withdrew two major discounts. In December, Russia offered Ukraine a 25 percent discount on natural gas, a deal that was cancelled because of Kiev’s overdue gas bills.

Another $100 discount per thousand cubic meters of gas was granted in return for the right to use the Sevastopol port in Crimea to host the Black Sea Fleet, annulled shortly after Crimea became a part of Russia in late March. Ukraine refuses to recognize the new $485 gas price, although the sum is fully in line with the contract that the two states signed in 2009.

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