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Naftogaz has to buy 27 bcm of gas in 2010 to avoid paying fine to Gazprom

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Nov. 25, 2009, 4:25 p.m. | Ukraine — by Interfax-Ukraine
The agreements signed on November 24 by Russia's Gazprom and Naftogaz Ukrainy cutting the minimum volume of gas to be purchased by Ukraine in 2010 from 52 billion cubic meters (bcm) to 33.75 bcm, has a provision allowing Ukraine to deviate from this volume by 20% without incurring fines, a source in the government told Interfax-Ukraine. "The documents envisage the possibility of cutting the amounts of the purchased gas by 20%, which is roughly to 27 bcm," he said.

As reported, the gas contracts signed in January 2009 and running to 2019 include take-or-pay provisions requiring Naftogaz to purchase at least 80% of the contracted amount for the year. However, over the ten months of the year Naftogaz has purchased 18.85 billion cubic meters of gas with the contracted volume being 31.7 billion cubic meters.

However, the Ukrainian and Russian premiers agreed during the meeting of the bilateral committee on economic cooperation in Yalta last week to reduce the contracted volume of Russian natural gas supplied envisioned in next year's contract as well as to formalize Gazprom's waiver of fines for Ukraine's underutilization of gas in 2009.

Gazprom and Naftogaz on November 24 signed supplements to the contract of January 19, 2009 setting the annual contracted amount of gas for 2010 at 33.75 bcm, and relieving Ukraine from fines for gas under-consumption in 2009
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