Ukraine's Naftogaz Starts Paying Off Debt to Gazprom

The Ukrainian energy utility Naftogaz has transferred USD 1.45 B to Gazprom, the first installment of its debt to the Russian concern, Naftogaz says.

The state-owned company wrote in a Tuesday statement that it had successfully paid amounts of gas that have already been delivered.

Gazprom introduced earlier this year a prepayment system for Ukraine in response to Naftogaz's refusal to deliver on its debt.

Moscow and Kiev struck an agreement in Brussels last week about how to settle their gas dispute.

Under the arrangements Ukraine had to pay USD 3.1 B (of which nearly half has now been transferred) in order to have supplies renewed and maintained this winter.

Gazprom is yet to confirm the move.

Deliveries to Ukraine might continue as early as this week after Russian Prime Minister Dmitry Medvedev signed a decree to scrap custom duties previously imposed on gas exported to the country.

Medvedev's step would allow Gazprom to adhere to last week's agreement and reduce price per 1000 cubic meters by USD 100, or to USD 378 in November-December, further reducing it to USD 365 in January-March, Russian news outlet Vedomosti reports.

Both Ukraine and Russia have described the recently approved solution as "temporary".