Russia offers Ukraine gas discount, sets conditions

Russia links the issue of discount for gas prices for Ukraine with guarantees for the purchase of Russian gas in the first quarter of next year, Russian information agency RIA Novosti has reported, with reference to the statement by Russian Energy Minister Alexander Novak.

"Of course, when we provide a discount, we want to understand how much gaswill be purchased under the contract. As in the fourth quarter, where it was set that Naftogaz would purchase two billion cubic meters of gas for the funds provided by the European Commission, it is advisable to understand, how much they will buy in the first quarter [of 2016]. So, I think that this requirement is absolutely rightful," he said.

The winter gas package signed by Ukraine, the Russian Federation and the EC on September 25, stipulates that Naftogaz would buy from Gazprom two billion cubic meters of gas at the expense of $500 million of the EC loan. As part of the winter package, for the fourth quarter of 2015, the Russian government provided Ukraine with a discount of about $20 per 1,000 cubic meters. Taking into account the discount, the price for this period is $227.36 per 1,000 cubic meters.

On October 12, in the framework of the winter package, Ukraine resumed purchases of Russian gas, but on November 25 it stopped them again. During this period, Naftogaz transferred to Gazprom $542 million of an advance payment for gas. This amount corresponds to the amount of 2,383 billion cubic meters of gas.