Resumption of Russian gas purchase is conditional on competitive price and approval of a new winter package
Naftogaz of Ukraine has proposed to Gazprom to sign an addendum to the gas supply contract between the parties, allowing Gazprom to be reinstated among Naftogaz’s potential suppliers. The addendum is aimed to solve the disputable issues that exist with regard to the conditions of Russian gas supply to Ukraine for the upcoming three quarters, typical to the "winter package". Signing such addendums of documents has been a standard commercial practice between the companies since 2014.
Naftogaz’s position has been unchanged for the past year and a half: purchasing gas from Gazprom is possible if the Russian company proposes a lower price than European suppliers of Naftogaz and if other terms are agreed. The Ukrainian company considers that economically justified price level for Russian gas for Ukraine is determined by "hub minus transport" at the country's eastern border. This approach corresponds with Naftogaz position in SCC arbitration.
Naftogaz expects that pricing conditions will be optimal in the third quarter and has presently limited its gas imports accordingly.
Diversification of gas supplies is an essential condition of Ukraine’s energy security and one of the key priorities in Naftogaz strategy. A broad range of potential suppliers to choose from is seen as a guarantee that Ukraine buys gas on the most competitive conditions.
For the first time, Ukraine did not purchase gas from Russia during the winter of 2015-2016. Naftogaz has not been importing gas from Gazprom since November 2015.