Gazprom CEO says Ukraine deal break not to put transit at risk

GORKI, Moscow Region, Mar 13 (PRIME) -- Cancellation of the gas transit contracts with Ukrainian energy holding Naftogaz Ukrainy will not threaten transit of Russian gas to the E.U. if Ukraine does not start to pilfer the gas, CEO of Gazprom Alexei Miller told Prime Minister Dmitry Medvedev on Tuesday.

“There are no risks for gas transit to Europe now, if, of course, Naftogaz Ukrainy does not start the outtake without authorization,” Miller said, adding that the agreement cancellation process will take 18 months to two years.

Cancellation of the contracts will help Gazprom avoid penalties for the transit of less than 110 billion cubic metres of gas a year, Miller said.

The Stockholm arbitration court ruled on March 1 that Gazprom pay Naftogaz Ukrainy U.S. $2.56 billion for non-shipment of gas. Gazprom said that the decision misbalanced the companies’ interests and requested termination of gas transit and delivery contracts with Ukraine.

Miller said that the volume of gas reserves in the European underground storages is critically low to ensure high demand for Russian gas and a rising importance of gas pipelines.

Gazprom expects that during the future litigations, the Stockholm arbitration court will remove the disparity between Gazprom and Naftogaz Ukrainy, he said.

Medvedev said that Russia is ready to hear Ukraine’s proposals to prolong the gas transit deals and that the offer must be economically beneficial. He also said that the recent comments by E.U. and U.S. officials on Gazprom and Naftogaz Ukrainy’s relations are inappropriate.

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