Azernews.Az

By Bloomberg

Russia’s state-run OAO Gazprom said it received a prepayment for natural gas from Ukraine, staving off the threat of a supply halt until Wednesday next week.

The Moscow-based exporter received $15 million from NAK Naftogaz Ukrainy, which is sufficient for about five days of supplies at the current level, Gazprom spokesman Sergei Kupriyanov said Thursday in an e-mailed statement. Given past payments, the new advance may run out the morning of March 11 in Moscow, according to Kupriyanov.

Ukraine agreed to advance payments under a deal brokered by the European Union in October after Russia halted deliveries to its former Soviet ally amid a pricing dispute. Similar disagreements in 2006 and 2009 disrupted transit flows to the EU during freezing weather. Gazprom uses Ukrainian pipelines to ship about 40 percent of its exports to Europe.

“Ukraine is paying in small installments but regularly,” said Maxim Moshkov, a Moscow-based oil and gas analyst at UBS. “That cuts the risk for the European transit.”

Naftogaz spokeswoman Aliona Osmolovska confirmed the payment by phone, declining to comment on how much Russian gas the Kiev-based company would order in the next week.

Ukraine, which transferred $15 million to Russia last week, doesn’t need large volumes as gas use is falling, Ukrainian Energy Minister Volodymyr Demchyshyn said yesterday, according to RIA Novosti. Naftogaz has been requesting about 10 million cubic meters a day.

Falling Inventories

The main issue now is whether Russia and Ukraine will agree on gas deliveries from April, when their EU-brokered deal expires, Moshkov said. As warmer weather approaches, “supplies through Ukraine are not so vital for Europe.”

The 28-nation bloc will have to boost gas shipments from Russia dramatically later this year, according to Moshkov. European gas inventories are falling at the fastest pace on record, with traders counting on a price slump during summer to refill them.

Europe will seek to bring Ukraine and Russia to a new gas accord at talks later this month, EU energy union chief Maros Sefcovic said on Tuesday. That deal should last until a final arbitration ruling on the countries’ gas contract, which runs through 2019, according to Sefcovic. Gazprom said the ruling may come by the middle of next year.

“No one wants a return to the conflicts of past years,” Russian President Vladimir Putin said yesterday, urging Ukraine to pay upfront before previous installments run out Friday.