By Stephen Fidler
BRUSSELS--The chief executive officer of Naftogaz, Ukraine's
state-owned natural gas company, said Thursday he couldn't
authorize paying Russia for March gas supplies because of a sharp
drop in the amount of gas delivered by OAO Gazprom since Feb.
22.
Russia has threatened to cut off gas supplies to Ukraine for
nonpayment but Andriy Kobolyev said in a telephone interview from
Kiev that Gazprom had been delivering 42 million cubic meters of
gas daily to Ukraine, instead of 112 mcm as had been
contracted.
This was in breach of the gas-supply agreement signed on Oct. 30
in Brussels and meant he couldn't responsibly authorize a
prepayment to Gazprom for March gas deliveries. "There is no sense
in paying for something we won't get," he said.
He said Ukraine had the funds available to make the payment, but
wouldn't say how much money had been set aside. Deliveries for
March could be below the February requirement, he added.
Ukraine supplies had not yet been cut because of underground
storage, which he said amounted to some 8 billion cubic meters, he
said.
Earlier Thursday, Sergey Kuriyanov, a spokesman for Gazprom,
said that "with the current level of supply, the prepayment will
only be sufficient until the end of this week."
"If the money doesn't arrive in time, gas won't be delivered,"
he added.
Mr. Kuriyanov said Gazprom was ready to separate the question of
gas supplies to the separatist-controlled region of Donbas from the
discussion about supplies to the rest of Ukraine.
The two sides appear to agree that, as of Wednesday, some 206
mcm of gas has been prepaid and remains to be delivered for
February.
Ukraine would attend a meeting with the European Union and
Russia over the issue on Monday in Brussels, Mr. Kobolyev said. The
EU has been brokering talks between the two sides.
He said Naftogaz cannot monitor imports into separatist-occupied
regions in eastern Ukraine, and didn't know what Russia was
delivering to the region. The maximum that could be delivered there
directly from Russia is 16 mcm daily, he said.
Naftogaz has said that Russian gas shouldn't be piped directly
into the separatist zones through two entry points there, because
it is an area of military activity and employees aren't at the
sites because their lives would be at risk.
Russian President Vladimir Putin on Wednesday accused Ukraine of
halting supplies to rebel-held eastern Ukraine, saying the alleged
action by Kiev "smells of genocide."
Mr. Kobolyev said he saw further gas deliveries from the EU as
the solution to Ukraine's overdependence on Russian supplies.
Deliveries from the EU have risen to about 1.4 billion cubic meters
a month. This could rise to 2 billion with existing infrastructure
if legal impediments Gazprom has placed on a pipeline through
Slovakia were removed, he said.
Supplies from the EU "continue to increase. We still need them
to be increased more," he said.
Write to Stephen Fidler at stephen.fidler@wsj.com
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