‘Naftogaz of Ukraine’ NJSC settles debt before RosUkrEnergo AG for gas supply in the first quarter of 2006

The National Joint-Stock Company ‘Naftogaz of Ukraine’ repaid the principal debt to RosUkrEnergo AG for the natural gas supplied in the first quarter of 2006. The sum in the amount of USD 306 million was transferred to the account of RosUkrEnergo AG on December 1.

Along with the USD 14 million remitted in November, ‘Naftogaz of Ukraine’ NJSC has fully paid for the natural gas received in the first quarter of 2006. As of the second quarter of the current year the imported natural gas is marketed in Ukraine exclusively by ‘UkrGaz-Energo’ JV.

‘Naftogaz of Ukraine’ NJSC and RosUkrEnergo AG continue negotiating ways to resolve contingency expenses incurred by RosUkrEnergo due to deferred payments by ‘Naftogaz of Ukraine’ NJSC, as well as terms for servicing the debt of RosUkrEnergo AG before ‘Naftogaz of Ukraine’ NJSC for transportation and storage of natural gas services.

For your information:

The debt of ‘Naftogaz of Ukraine’ NJSC to RosUkrEnergo AG resulted from incompliance of the approved by the NERC tariffs for January-March 2006 for supplying the natural gas to heat, public utilities (UAH 209 ($41,4) without VAT per 1,000 cubic meters of gas) with the purchase price of the imported natural gas (USD 95 or UAH 479.75 per 1,000 cubic meters of gas without VAT plus transportation costs).

Losses from the sale of each 1 thousand cubic meters of imported natural gas to heating companies in January-May exceeded UAH 300 ($59.4).due to incompliance of tariffs.

The overall losses of ‘Naftogaz of Ukraine’ NJSC from selling the imported natural gas to consumers in Ukraine (including the sale to the home users) in the first six months of 2006 exceeded UAH 3.69 billion ($0.73 billion).

The overall debt of ‘Naftogaz of Ukraine’ NJSC to RosUkrEnergo AG as of May 1, 2006 comprised USD 631 million. ‘Naftogaz of Ukraine’ NJSC paid off USD 200 million of the debt in June, 2006 and another USD 111 million – in July-October, 2006.

As of the second quarter of 2006 ‘Naftogaz of Ukraine’ NJSC has not been engaged in direct purchases of gas from RosUkrEnergo AG due to commencement of operation of the joint venture of the two companies i.e. ‘UkrGaz-Energo’ CJSC.

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