Naftogaz Says It Notified Gazprom of Gas Reduction

Ukrainian state-owned gas company Naftogaz Ukrainy has said that it notified Russian gas supplier Gazprom of its intention to reduce its gas imports well in advance of the reduction being made.

"In accordance with the provisions of the contract and within the time limits specified the Naftogaz Ukrainy national joint stock company sent about ten of letters to the Gazprom joint stock company requesting to reconcile natural gas supply to Ukraine in 2012 in the amount of 27 billion cubic metres (bcm)," a statement from the company said.

The company said that, given Ukraine's economy and Naftogaz's current needs, it had notified Gazprom that it would reduce its import amounts from 52 bcm to 27 bcm.

"Given the high price of imported natural gas, in particular, it amounted to about $400 [per 1,000 cubic meters] in the fourth quarter of 2011, taking into account the discount provided in line with the Kharkiv agreements, the needs of the Ukrainian economy in this energy resource significantly decreased in 2012," Naftogaz said.

Yesterday, Gazprom CEO Alexey Miller said that he was "concerned" about Naftogaz's planned reduction of supply.

"Gazprom is concerned about today's statements that Ukraine is going to take a significantly lower amount of gas than stipulated by the contracts," he told Russian President Dmitry Medvedv.

He said that Ukraine would still have to pay for the originally agreed gas volumes.

"In case of non-use, the conditions are you must pay for unused gas," he said.