Yesterday, Ukraine confirmed that it had begun to receive gas shipments from Russia’s state owned Gazprom (ticker: OGZPY) after a six-month cutoff, reports news agency ITAR-TASS.
“Imports from Russia began two days earlier than planned,” Ukraine’s gas transport company Ukrtrangaz said in a statement. Ukrainian Energy Minister Volodymyr Demchishin said Ukraine had paid Gazprom on Friday, December 5, for the delivery of 1 billion cubic meters (35.3 billion cubic feet) of natural gas.
Ukraine paid $378 million for December’s gas supplies, based on a price discount granted by Gazprom at gas talks between Moscow and Kiev with the European Union’s mediation in Brussels on November 30. The agreed upon price of Russian natural gas supplies is $378 per 1,000 cubic meters ($10.70/ Mcf) in the fourth quarter of 2014 and $365 per 1,000 cubic meters ($10.33/Mcf) in the first quarter of 2015, based on the talks in Brussels. By comparison, United States consumers (including the residential, commercial, industrial and electric sectors) paid an average price of $5.91/Mcf in September 2014, according to data from the Energy Information Administration. The industrial and electric sectors account for 83% of all U.S. natural gas consumption and pay a consumer price of less than $5.00/Mcf.
The current agreement between Ukraine and Gazprom requires Ukraine to pre-pay for its gas supplies every month.
Andriy Kobolyev, CEO of Ukrainian state energy company NAK Naftogaz Ukrainy, said Ukraine will probably offtake as much as 5 billion cubic meters (176.6 billion cubic feet) of Russian gas until the end of the winter season, reports Bloomberg Businessweek.
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