Ukraine Saves $500m on Reverse Gas Flow

Ukraine Saves $500m on Reverse Gas Flow Ukraine Saves $500m on Reverse Gas Flow

Ukraine has saved some $500 million on replacing Russian gas supplies with reverse flows from Europe, Ukrainian Prime Minister Arseniy Yatsenyuk said, RIA Novosti reported.

“Russia completely closed gas supplies back in June. We turned to the European Union and for the first time in 23 years, 60 percent of the gas we previously bought from Russia, we began buying from the EU. We saved $500 million on the price, thanks to the fact that we did not agree to the Russian proposal,” Yatsenuk said in an interview with the Ukrainian 1+1 television channel on Sunday. In June, Russian energy giant Gazprom was forced to introduce a prepayment system for gas deliveries to Ukraine due to Kiev's massive debt, which is currently estimated at over $5 billion. During ministerial talks in Berlin in September, Russia and the European Commission proposed a so-called winter package to Ukraine, which states that Ukraine should pay off $3.1 billion of its debt by the end of 2014 in exchange for gas supplies during the winter. Russia also insisted that Ukraine pay the first tranche of $2 billion before the start of the deliveries.

On October 13, Russia said it was ready to offer Ukraine a more flexible schedule for the repayment of the debt. The schedule saw Kiev paying $1.45 billion in the first installment of the $3.1 billion, with the rest of the debt being paid by the year-end. On the same day, Ukrainian Energy Minister Yuriy Prodan stated that Ukraine was not willing to make any advanced payments for Russian gas supplies, insisting that payments should be made upon delivery. However, Yatsenyuk said Sunday that the government has accumulated $3.1 billion on its accounts to pay off the debt for gas supplies from Russia.

"We have the funds – the government has accumulated $3.1 billion on [its] accounts," Yatsenyuk said.