Naftogaz Calls Out Gazprom for Failing to Supply Prepaid Gas to Ukraine

Naftogaz claims that Gazprom has failed to supply requested prepaid gas volumes to Ukraine and claims a violation of the Binding Protocol signed on October 30, 2014.

The Ukrainian national oil and gas company has requested an explanation from Gazprom regarding its assertion that the Russian company failed to supply prepaid gas volumes on February 22, 2015. Naftogaz ordered 114 million cubic meters in line with the “Winter Package” supply conditions, but Gazprom delivered only 47 million cubic meters.

In a release today, Naftogaz said that it considers this failure to deliver prepaid gas a violation of the Binding Protocol signed by Russian Energy Minister Alexander Novak, European Commission Vice President Guenter Oettinger and Ukrainian Energy Minister Yuriy Prodan .

Naftogaz has provided a Notice of this breach of contract and of the Brussels Binding Protocol to the Cabinet of Ministers of Ukraine, the European Commission and the Energy Community Secretariat.

Naftogaz’s remaining prepaid balance with Gazprom stood at 454 million cubic meters on February 19; on the same day, Naftogaz ordered 114 million cubic meters of gas through the Sudzha, Pysarivka, Sokhranivka, Valuyki, Kobrin and Mozyr metering stations. According to paragraph 3.3, supplement 33 (30 October 2014) to the 19 January 2009 contract for the supply of natural gas,  the buyer is entitled to make a daily order ranging from zero to 114 million cubic meters of natural gas. The seller, in turn, is obliged to fulfill such a request in full if the application was filed two days in advance. The legally permitted deviation from the requested daily delivery order volume is not more than 6%.

As of February 23, Naftogaz’s remaining prepaid balance with Gazprom stands at 287 million cubic meters.