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Russia may resume gas supply next week if Ukraine pays $2.2 billion

Russia may resume gas supply next week if Ukraine pays $2.2 billion

Russia may restart gas supplies to Ukraine as soon as next week if Kiev pays $2.2 billion (1.4 billion pounds) worth of debts and pre-payments, Alexei Miller, head of state gas monopoly Gazprom, said on Friday.

Moscow, Kiev and the European Union clinched a deal on Thursday that would resume supplies of Russian gas to Ukraine over the winter in return for payments funded in part by the Ukrainian government’s Western backers.

Gazprom halted supplies to Ukraine in June amid a bitter dispute over debts and pricing between Moscow and the former Soviet republic that is now seeking to foster closer ties with the West rather than Russia.

Miller said Gazprom would restart supplies to Ukraine within two days after Kiev covers part of its debt for past gas deliveries and provides a pre-payment for supplies that would reach it in November.

“Everything depends on when Ukraine makes this payment. We understand this can happen by the end of next week,” Miller told state TV broadcaster Rossiya 24 in an interview when asked about possible timing for resuming supplies.

Miller said Ukraine must provide $1.45 billion to cover for part of gas debt and pay $760 million up front for November before supplies resume. By the end of the year, Kiev must pay a total of $3.1 billion in debts for past deliveries, he added.

He said Kiev will need to pay another $760 million in advance to receive gas in December and that maximum daily supplies stood at 114 million cubic metres with a deal between the sides for monthly supplies of 2 billion cubic metres in both November and December.

The deal struck in Brussels on Thursday allows Kiev to use some resources under its existing accords with the EU and the International Monetary Fund to fund the pre-payment. Kiev says it has resources put aside to cover past debts to Gazprom.

Under the agreement, Ukraine would buy gas for the rest of this year at $378 per 1,000 cubic metres and at $365 in the first quarter of next year.

Russia says the price amounts to a $100 discount compared to previous agreements with Ukraine and Miller said on Friday he expected Russia’s government to approve it formally on Saturday.

Read More:Russia may resume gas supply next week if Ukraine pays $2.2 billion – Gazprom | Reuters.

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