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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. A delegation of Naftogaz Ukrainy officials will begin legal formalities to reduce contracted gas purchase volumes from Gazprom in 2010 on Nov. 24 in Moscow, Naftogaz Ukrainy head Oleh Dubyna said at a briefing on Nov. 23.

The two companies will also formalize Gazprom's waiver of fines for Ukraine's underutilization of gas in 2009, as instructed by the prime ministers of the two nations during the meeting of the bilateral committee on economic cooperation in Yalta last week.

"We will figure out how much we want to consume in 2010 and those documents will be signed," Dubyna said.

"Tomorrow [on Tuesday, Nov. 24] our delegation will depart for Gazprom in order to get that down on paper," he said.

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. Under those provisions, Naftogaz would have to purchase a minimum of 32 billion cubic meters (bcm) this year and 41.6 bcm next year.

Throughout the first half of the year Naftogaz purchased less than the amount stipulated in the contract. It was scheduled to purchase 5 bcm in the first quarter, 10 bcm in the second, 12 bcm in the third and 12.5 in the fourth. In fact, Naftogaz purchased just 2.8 bcm in the first quarter, about 5.7 bcm in the second, and 3.2-3.3 bcm a month in the third quarter.

As of the middle of November, Naftogaz Deputy CEO Vadym Chuprun estimated that Gazprom could seek $5.8 billion in penalties from Naftogaz, rising to about $8 billion for the entire year if current consumption volumes persist.

Naftogaz Ukrainy previously requested that it reduce the gas import volume in 2010 to 33 bcm from 52 bcm previously.