REUTERS
The new contract with Gazprom has a ship-or-pay clause.
CEO of National Joint-Stock Company Naftogaz of Ukraine Andriy Kobolyev says that despite the drop in gas consumption in the European Union over the coronavirus quarantine and a reduction in Russian Gazprom's gas supplies to Europe, Ukraine's gas transit revenue will not shrink, remaining at the level stipulated by the contract with the Russian gas giant.
Read alsoUkraine first time carries out gas transit between EU countries
"The new contract that was signed with Gazprom has a ship-or-pay clause. Now we see that Gazprom is pumping significantly less [gas] than last year because of the crisis in Europe and lower consumption. But this does not lower the revenue of Naftogaz and a new independent operator [Gas Transmission System Operator of Ukraine (GTSOU) LLC]. The ship-or-pay clause stipulates that no matter how much of gas Gazprom has pumped through, it pays the price that was originally booked," he said on a Ukrainian TV channel on March 27.
As UNIAN reported earlier, on December 30, 2019, Ukraine and Russia signed a new gas transit contract for a period of five years, obliging Russia's Gazprom to pump a minimum of 65 billion (bcm) of gas via Ukraine in the first year and 40 bcm annually in the next four years. The parties may extend the contract for another ten years.