Ukraine could buy fixed volume of Russian gas

Ukraine is ready to discuss the possibility of buying a fixed volume of gas from Russia as a part of the ‘summer package’ if the prepayment condition is removed, the country’s Energy and Coal Minister Volodymyr Demchyshyn said at a press conference in Kiev on Wednesday.

Ukraine could agree to buy a fixed volume of gas every month under the agreement, but the key issue in the negotiations is still the price – Ukraine expects Russian gas to cost less than $270 per thousand cubic metres (Mcm: $7.35/MMBtu), Demchyshyn said.

“The price on the spot market in Europe has now fallen below $270/Mcm, which is why we’re expecting the prices that will be under discussion to be considerably lower. I am not yet ready to name any figures, but it’s certainly below $270/Mcm. I’d like it to be below $250/Mcm,” Demchyshyn added.

Ukraine intends to raise the issue of increasing the rate for transiting gas through its territory during upcoming talks with Russia, he said. 

The rate amounted to $2.88/Mcm for the first quarter of 2015. The existing Gazprom contract formula only includes transport services, and Ukraine wants to revise the formula to include funds for maintaining transport infrastructure.