Ukraine, Gazprom Bicker Over Dates

Ukraine said Wednesday it had paid off the debt for last year's gas imports from Russia, but Gazprom warned that the country needed to take care of the growing arrears for this year.

The two sides are locked in a payment dispute for the second time this year after Gazprom on Tuesday threatened to cut off one-quarter of Ukraine's gas supplies starting Monday.

Ukrainian First Deputy Prime Minister Oleksandr Turchynov told a Cabinet meeting Wednesday that state-owned Naftogaz had paid for 2007 supplies. He then showed invoices, saying they had bank stamps proving that funds were transferred to UkrGazEnergo, a gas trader that serves as a middleman between Gazprom and Naftogaz.

"We hope that this money will reach Gazprom," he said, Interfax reported.

Gazprom spokesman Sergei Kupriyanov countered that Ukraine should do more to maintain its gas supply. "To pay what you owe for last year is not a big feat. It's nothing to be proud of," he told reporters in Moscow.

Debts for this year's gas supplies are growing, Kupriyanov warned, because Ukraine has not signed contracts to buy gas from Central Asia and Russia but continues to receive the fuel.

A source familiar with the Ukrainian gas market said Wednesday that Ukraine had so far consumed 8 billion cubic meters of imported gas in January and February, one-quarter of it from Russia. That would put Ukraine's outstanding debt for this year at $1.7 billion, given that Gazprom charges $314.70 to sell 1,000 cubic meters of gas to Ukraine. The price of Central Asian gas for Ukraine is $179.50. Naftogaz simply doesn't have this money, the source said.

Naftogaz spokesman Ilya Savin conceded that the contracts to buy gas were not yet in place and blamed gas traders RosUkrEnergo and UkrGazEnergo for the delay. Spokesmen for both traders denied their companies were at fault.

Earlier this month, Gazprom threatened to reduce supplies to Ukraine. Presidents Vladimir Putin and Viktor Yushchenko averted the cutoff by reaching a deal that Ukraine would pay off a debt of $1.5 billion, calculated Feb. 8 to cover supplies for last year plus January and February. Gazprom CEO Alexei Miller said at the time that Naftogaz agreed to pay for January and February supplies by the end of this month.

The presidents' deal also stipulated the replacement of the two middlemen by a new pair of intermediaries, which would exclude Ukrainian businessmen Dmytro Firtash and Ivan Fursin from the supply chain and make Gazprom and Naftogaz 50-50 partners in the new intermediaries.

Kupriyanov said Ukraine was dragging its feet on signing Gazprom's proposals, sent Feb. 14, to receive imported gas.

Savin said Naftogaz rejected some of these proposals. He didn't elaborate, but Vedomosti reported Wednesday that Naftogaz had objected to Gazprom having equal control with Naftogaz of gas in Ukraine, both imported and produced domestically.

Savin declined to comment and Kupriyanov could not be reached for comment Wednesday afternoon.