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Gazprom stands firm on gas volumes for Ukraine

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Jan. 12, 2012, 2:33 p.m. | Business — by Reuters

Reuters

MOSCOW, Jan 12 (Reuters) - Russian gas exporting monopoly Gazprom said it would not bend to Kyiv's demand to cut the contracted volumes of gas it supplies to Ukraine this year, reiterating on Thursday its stance in negotiations. Energy spats between Moscow and countries such as Ukraine, through which its gas passes to Europe, have led in the past to temporary cuts in gas supplies to the European Union, which is now seeking alternatives to reduce its dependence on Russian gas.

Kiev has asked Gazprom to reduce the volumes of gas it sells to the former Soviet republic, whose gas bill last month amounted to $1 billion, an amount Ukraine's fragile economy can ill afford.

Ukrainian authorities say they will insist on cutting Russian gas imports to 27 billion cubic metres (bcm) this year from an estimated 40 bcm last year. But Gazprom insists this level is too low.

"According to the contract, a change in annual volumes cannot exceed 20 percent. In 2012, as everyone knows, the contractual supply volume stands at 52 bcm and cannot be cut to 27 bcm even in theory," Gazprom spokesman Sergei Kupriyanov said.

Russia and Ukraine have been engaged in months of negotiations on gas prices, which stand at $416 per thousand cubic metres in the first quarter of 2012, according to a Ukrainian government source. Ukraine sees a fairer price at $250.

The ownership of Ukraine's cherished pipeline system, through which Russia used to ship 80 percent of its gas exports to Europe before the launch of the Nord Stream underwater pipeline last November, is also a subject of talks.
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