Ukraine won’t buy Russian gas until yearend — minister

Ukraine will not buy Russian gas until the end of the year, Ukraine’s Minister of Energy and Coal Mining Industry Volodymyr Demchishin said at a press conference on Monday.

“At the moment gas consumption is lower than we expected. Therefore, underground gas storages have enough gas to use it and not to buy. There are several reasons not to buy gas. For example, we expect that in the first quarter the price will be lower. Therefore, there is no critical need to make an advance payment,” he said.

Demchishin said earlier that Ukraine needed 19 bln cubic meters of gas for passing the winter season. At the same time, he noted that “unfortunately, it is almost impossible to gather 19 bln cubic meters of gas despite the money from the EBRD (the European Bank for Reconstruction and Development).

According to Chief Executive Officer of the country’s national oil and gas company Naftogaz Andrey Kobolev, Ukraine’s current gas reserves stored in underground facilities are enough for the country to replenish its stock only from the European Union by the end of winter.

“Given the current gas reserves in underground storage facilities we may buy additional gas only from the EU not only by the end of this year but by the end of this winter,” Kobolev said in an interview with UNIAN.

Currently, Ukraine has 17 bln cubic meters of gas stored in its underground facilities, Kobolev said, adding that it’s already clear that it’s profitable for Ukraine “to buy gas from Europe”. “We already see that it’s profitable for us to buy gas from Europe that’s why we’ll surely do so,” he said.

Regarding gas purchases from Russia in 2016, Kobolev said the issue will depend on the price for Russian gas, though he added that the respective negotiations have not started yet. “I think they /negotiations/ will start in the nearest future. We plan to understand by the end of the year what price we may agree with Gazprom for the first quarter of 2016 as we need it both for planning our finances and for understanding how to form gas purchases portfolio,” he said.

Earlier Ukraine suspended pumping natural gas to its storage facilities and started its offtake for passing the upcoming heating season. Kobolev said Kiev had accumulated more than 17 bln cubic meters of gas and does not plan further pumping by the end of the current year.

According to the data provided by Ukraine’s gas pipeline operator Ukrtransgaz, the country continues importing gas from 4 directions – from Russia, Slovakia, Hungary and Poland.

Kobolev said that Naftogaz will buy Russian gas only at favorable market environment and as deemed necessary. “We’ll be paying for Russian gas as deemed necessary. In case we need it we buy, in case we don’t need it we don’t buy. We’ll be buying in case we see favorable environment,” Kobolev said.

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