Thursday, February 26, 2009

Ukraine's Naftogaz Seeking Changes To Russia Gas Deal

KIEV, Ukraine -- Ukraine's debt-burdened company Naftogaz wants changes in a hard-won natural gas deal with Russia that ended Europe's gas cutoff, officials said Thursday, amid concerns of a renewed dispute between the two neighbours.


Naftogaz has asked Russia's gas giant Gazprom to allow Ukraine to buy less natural gas this year than previously agreed, according to Gazprom and President Viktor Yushchenko's office.

The contract signed in January locks Naftogaz into buying 40 billion cubic metres of gas this year, but the company is asking to buy only 33 billion.

Naftogaz representatives were not immediately available for comment.

The move raises fears of a repeat gas war between Moscow and Kiev as Gazprom is unlikely to yield to Kiev's request. The January dispute left over a dozen European countries cut off in winter after Gazprom halted gas supplies through Ukraine, accusing its neighbour of stealing the fuel.

A spokesman for Gazprom confirmed receiving Naftogaz's request, but declined any further comment.

Naftogaz said last week it may run into arrears with Gazprom because of deep financial problems.

Fresh arrears by Naftogaz could lead to a new conflict with Russia. The deal that ended January's rift stipulates that Naftogaz will have to make advance payments for gas shipments if it runs up arrears — a commitment the debt-laden company may be unable to fulfill.

Naftogaz has long been plagued by financial problems. It is struggling to stay afloat with more than $4-billion (U.S.) in debt. It has twice narrowly averted technical default on its Eurobond obligations.

Source: AP

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