Ukraine Transfers Gas Prepayment to Russia's Gazprom

Ukrainian state-owned utility Naftogaz has paid USD 378 M to the Russian concern Gazprom, in line with to its plans to have booked a billion cubic meters by the end of 2014.

Gazprom confirmed within a few hours the news announced Saturday on Naftogaz's website.

The move comes after Ukraine, Russia and the EU Commission adopted on October 31 a plan envisaging the renewal of gas flow to Kiev, which includes the purchase of additional volumes of gas under the prepayment system.

Under current arrangements Kiev is to be granted a discount equaling USD 100 per 1000 cubic meters between November 1 2014 and March 31 2015, down from the USD 485 per the same volume set by Gazprom in April, when the gas dispute first began, two weeks after the peninsula of Crimea was incorporated into Russia and a previous agreement of Moscow ousted Ukrainian President Viktor Yanukovych (which set relatively low prices for gas delivered to Ukraine) was scrapped.

Ukraine's gas flow was halted by Gazprom after the latter introduced prepayment in June, a system which Kiev could not afford amid economic and financial turmoil.

In November, after the trilateral agreement was reached, Ukraine paid off the first chunk of its gas debt, transferring nearly half (USD 1.45 B) of the USD 3.1 B it owed to the Russian energy giant.