Ukraine has signed a new agreement to buy Russian gas for the next three months at $248 per thousand cubic metres, after paying $329 in the first quarter of this year under the just-expired ‘winter package’, the Ukrainian energy ministry said on Thursday.
Despite being at loggerheads over a separatist rebellion in east Ukraine, the two sides are bound by a 10-year gas agreement signed in 2009 which successive Kiev governments say carries an onerous price.
Apart from the price, the latest agreement extended all the other terms of the ‘winter package’ which has just lapsed between Ukraine’s state gas concern Naftogaz and Russia’s gas giant Gazprom, the ministry said in a statement.
The agreement represented a ‘victory’ for an economic approach to relations between Naftogaz and Gazprom over a political approach, Energy Minister Volodymyr Demchyshyn was quoted as saying on his ministry’s website.
The new deal would hold good for the second quarter of this year while talks continue to find a more lasting agreement to end the long-standing pricing row with Russia.
Demchyshyn said on Wednesday that Ukraine hoped to sign a memorandum with Moscow this month on supplies that would run until the end of March 2016.
Russia and its former Soviet neighbour agreed last year on a ‘winter package’ for supplies with a price discount of $100 per thousand cubic metres and advance payments, but that accord expired on Tuesday and had to be replaced.
The energy ministry’s statement on Thursday indicated that a requirement for pre-payment for Russian gas supplies by Ukraine, whose economy teeters on the edge of bankruptcy, would stay in place.
Although the ‘winter package’ formally expired on Tuesday, the gas pipes remained open and Russia’s Gazprom said it would fulfill a Ukrainian request for 5 million cubic metres of gas from the beginning of April.
Previous gas disputes between Ukraine and Russia have affected European Union markets, where Gazprom covers a third of gas demand. Around 40 per cent of that gas travels via Ukraine.
On Wednesday, European Commission Vice-President Maros Sefcovic said he would broker talks in the middle of April and was hopeful of being able to negotiate more favourable terms for Kiev.
Russia had already said it would extend a gas price discount for Ukraine into the second quarter, although Russian President Vladimir Putin was quoted as saying that any further decisions would be taken in three months and depend on the price of oil.
Ukraine’s energy ministry said on Wednesday it saw a price of around $250 for Russian gas as more realistic given the fall in global energy prices.