Statement on the working meeting between Alexey Miller and Oleg Dubina

Gazprom’s Headquarters hosted today a working meeting between Alexey Miller, Chairman of the Company’s Management Committee and Oleg Dubina, Chairman of the Board of Naftogaz Ukrainy. 

The parties discussed the implementation of long-term gas supply and transit contracts. In particular, parties discussed the issue of payment by the Ukrainian side for the current gas supplies as well as the need to fill underground gas storage facilities by Naftogaz Ukrainy to fulfill its supply and transit of gas obligations in 2009-2010 heating season.

Following the meeting, Alexey Miller said that “It is as yet unclear whether Naftogaz of Ukraine could be able to pay in full and on time for gas supplied in May. The payment, as everybody knows, should be made by June 7”.  

He added that it was impossible to talk about the disconnection of Ukraine from gas supplies after Naftogaz signed a ten-year contract with Gazprom. “Even if it comes to the switch to advance payments [for gas], Naftogaz will decide itself how much gas it needs. They will get as much as they pay for. There's no question of cut-offs," he said.

Background:  

On January 19, 2009 JSC Gazprom and Naftogaz Ukrainy signed two separate long-term contracts to transit Russian gas to Europe through the Ukraine and supply gas to Ukrainian consumers. The contracts are valid from 2009 until 2019 inclusively.

The transit contract allows the retention in 2009 of a privileged transit fee of $1.7 for transiting 1000 cubic meters of gas per 100km. As of January 1, 2010 the transit fee will become a market rate and will be calculated by the conventional European formula.

According to the agreement to supply gas to Ukraine, the price of the gas for the Ukrainian users is calculated by the conventional European price formula with a reduction coefficient of 0.8. The price is changing every quarter. As of January 1, 2010 Gazprom will begin selling gas to Ukraine according to a market-based European price without any reductions.