Gazprom Tells Ukraine to Pay Up

Yesterday Dmitry Medvedev ordered his old company Gazprom to enforce payment of a gas debt of $2.4 billion from the Ukraine, while Alexei Miller slipped in the announcement that Kiev would have to pay more than $400 per thousand cubic metres for gas next year, more than double the current $179.5.  The following is the transcript from

RUSSIAN PRESIDENT DMITRY MEDVEDEV: Alexey Borisovich, as I understand it, you are now conducting negotiations with our Ukrainian partners to sign contracts for next year. This has to be done. We certainly are already in the run up to the new year.

The situation is a bit complicated. Of course I am referring in particular to current oil prices, the overall financial and economic situation in the world, and its consequences for our country. I wish to draw attention to the fact that our Ukrainian partners owe us a pretty substantial amount of money.

I think it’s inexcess of 2 billion dollars, something like 2.4 billion. That is a lotof money for any state or for any company, Gazprom included. We agreedwith them that the money will be paid in due course. I would like youto tell me how things are going, where the money is, and what thesituation is concerning the signing of a contract for the next period.Because we have agreed: the Prime Minister [of Ukraine YuliaTymoshenko] came to our country, we held talks, and a general agreementwas reached. Is it being implemented?

CHAIRMAN OF THE BOARD OF GAZPROM ALEXEY MILLER:In the last few days, we have been negotiating with a delegation fromNAC [Naftogaz of Ukraine] here in Moscow. I can say that long-termcontracts to supply gas to Ukraine and the long-term contract on thetransit of Russian gas through Ukrainian territory are both ready to besigned. At the corporate level, we have prepared all the necessarydocuments. It is a long-term contract to supply gas to Ukraine and itincludes a transition by 1 January 2011 to sell gas supplies to Ukraineat a price determined by a formula that has been accepted by allEuropean countries. To date, the debt issue is not resolved, and thequestion that you asked – where is the money? – is apposite. The sum isabsolutely astronomical, 2.4 billion dollars. However, to date therehas been no progress in negotiations with the Ukrainian side concerningwhen we might receive this money.

DMITRY MEDVEDEV: Then you need to take allmeasures available within the framework of relations between ourcountries. I am thinking of the ones in various treaties andadministrative measures. You are in contact with our partners. Bring meup to date on how things are going because, as I recall, this is anagreement that was reached some time ago. That is, it is part of apackage that was agreed to during the Ukrainian Prime Minister’s visitto Russia. Is that correct?

ALEXEY MILLER: Yes. During the time that haselapsed since the visit of the Prime Minister of Ukraine to the RussianFederation, not only has the debt not diminished – it has actuallyincreased.

DMITRY MEDVEDEV: I see. So as far as the debt isconcerned, we have to decide once and for all and recover it whethervoluntarily or forcibly, as determined by the relevant legislation thatgoverns our bilateral relations.