Ukraine mulls gas consumption cuts in face of Gazprom's latest move

By suddenly refusing to supply prepaid gas, Gazprom is pushing Ukraine toward taking advantage of transit flows, in an attempt to discredit the country in the eyes of international community.

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NJSC Naftogaz of Ukraine has proposed to introduce a restriction on gas consumption on March 3-4 due to the freezing temperatures across Ukraine and the Russian Gazprom's refusal to supply gas to Ukraine from March 1 this year, despite an advance payment carried out, Naftogaz CEO Andriy Kobolyev said at a meeting of the National Security and Defense Council of Ukraine on Thursday.

"There is an action plan approved by the order of the Ministry of Energy and Coal Industry on November 2, 2015. The plan provides for the introduction of a special gas consumption regime, where enterprises that have alternative fuels switch to such alternative types, and work with thermal generation companies to reduce gas consumption by approximately 5-10%. We believe that these measures should be sufficient in order not to create a gas deficit in the grid and to exclude the situation to which, in our opinion, Gazprom is pushing us – that is, to take advantage of transit gas flows," Kobolyev said.

Read alsoPoroshenko: Naftogaz should work toward court seizure of Gazprom's assets if debt not paid"I propose that the Ministry of Energy put the action plan into effect starting Saturday, March 3. For March 2, gas resources are now being purchased, although at a relatively high price, but we will cover this. Saturday-Sunday is the risk zone we are concerned about technologically," he added, noting that after March 4, warming is expected, therefore gas consumption will decrease.

Naftogaz CEO stressed that legally, Ukraine has the right to use gas flowing from Russia, as it has already been paid for. At the same time, the problem is that this is exactly what Gazprom expects Ukraine to do, "to tell Europeans from their PR perspective: 'Look, they are taking Russian gas again'."

Kobolyev said that the situation is a result of the recent cold snap making Ukraine see a record daily gas consumption of 200 million cubic meters, with 18 million cubic meters becoming a deficit, which could be covered by gas supplies from Russia.

Kobolyev noted that this deficit would partly be covered by gas purchases at high prices from the European direction, adding that Gazprom would later be billed for this as a result of their non-fulfillment of contract.

"At the same time, we still believe that approximately 10 million cubic meters of gas per day will be the expected deficit, which we cannot now cover," said Kobolyev.

As UNIAN reported earlier, Ukraine, in the person of Naftogaz, sued Gazprom in the Stockholm Arbitration Court over the two contracts: on the transit of Russian gas to the European Union and Ukraine's purchase of Russian gas.

Read alsoNaftogaz seals win in Stockholm arbitration dispute with GazpromIn December 2017, Naftogaz saw the final decision of the Stockholm Arbitration regarding the supply of Russian gas to Ukraine, with the court satisfying basic demands of the Ukrainian side.

The second decision concerns the transit contract concluded in 2009. According to the deal, Gazprom must transport via Ukraine 110 billion cubic meters of gas annually. Since this condition was not met, Naftogaz demanded to collect $16 billion from the Russian company.

On February 28, Naftogaz received the final decision of the Stockholm Arbitration ordering that Gazprom pay Naftogaz $4.63 billion.

Following the consideration of both cases, Gazprom owes the Ukrainian company $2.56 billion, while the Ukrainian company owes nothing.

After seeing the court's decision, on the morning of March 1, Gazprom refused to supply gas to Ukraine in March 2018. At the same time, the Russian company has already received an advance payment from Ukraine.

Read alsoKyiv seeing transport collapse: Traffic accidents, jams (Photo, video)Naftogaz has called such behavior by Gazprom a violation of the Stockholm Arbitration award. Moreover, according to Ukrtransgaz, Ukraine's state-owned gas transmission system operator, there has not been a single day that Gazprom observed a contractual demand to maintain the necessary level of gas pressure at the entrance to the Ukrainian GTS.

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