Kiev publishes text of trilateral gas protocol

The legally binding protocol which was signed by Ukraine, Russia and the European Union in Brussels sets the conditions for natural gas deliveries from Russian gas giant Gazprom to Naftogaz of Ukraine from November 2014 to March 31, 2015 and is aimed at covering Ukraine's domestic gas needs over this period and guaranteeing the security of the gas supply.

The legally binding protocol which was signed by Ukraine, Russia and the European Union in Brussels sets the conditions for natural gas deliveries from Russian gas giant Gazprom to Naftogaz of Ukraine from November 2014 to March 31, 2015 and is aimed at covering Ukraine's domestic gas needs over this period and guaranteeing the security of the gas supply.

The text of the trilateral document was published on the Ukrainian cabinet's website on Friday.

According to the document, the parties agreed to the gas price set by the protocol, as well as the payment and delivery terms and the terms of gas transit payments determined by it, as well as Naftogaz of Ukraine's schedule for repaying its debts to Gazprom.

"Taking due account of the pending arbitration [between Gazprom and Naftogaz of Ukraine in Stockholm], this protocol shall be without prejudice to the legal positions taken by either Gazprom or Naftogaz in this arbitration, and can only be considered as a temporary solution laying down the necessary conditions under which gas sales and purchases from November 2014 until March 31, 2015 between Gazprom and Naftogaz can be carried out," the preamble to the protocol says.

"For the period from November 2014 until March 31, 2015 the price of natural gas supplied by Gazprom to Naftogaz [under the 2009 contract] shall be decreased by the amount of export duty decrease provided by the government of the Russian Federation. The decrease of the export duty shall be calculated according to the following formula: at a price lower than $333.33 per 1,000 cubic meters the reduction is 30% from such a price," the document says.

"The payments for natural gas purchased during the period between November 2014 and March 31, 2015 shall be carried out before delivery takes place. Gazprom commits to deliver all paid volumes in accordance with the [2009] contract and the Addendum to it, dated October 30, 2014," the protocol says.

"The payment for transit services will be made by Gazprom in full to the bank account of Naftogaz in accordance with the Transit Contract," it says.

Concerning Naftogaz of Ukraine's schedule of eventual debt settlement, the protocol stipulates that Naftogaz will pay $3.1 billion to Gazprom for amounts delivered in November and December 2013, as well as April, May and June 2014 in two tranches - the first tranche of $1.45 billion before the first delivery of Russian gas in 2014, and the second tranche of $1.65 billion before December 31, 2014.

"For Naftogaz, the payment of $3.1 billion under the schedule of payments constitutes the full payment of the unpaid invoices (calculation based on a price of $268.5 per 1,000 cubic meters)," it says.

"For Gazprom, the payment of $3.1 billion under the schedule of payments constitutes a partial payment of Naftogaz's unpaid invoices for the gas supplied in November and December 2013, as well as in April, May and June 2014 in accordance with the [2009] contract," the protocol says.

After the signing ceremony, Russia and Ukraine said that Ukraine would pay around $378 per 1,000 cubic meters of gas in November and December 2014, and $365 per 1,000 cubic meters of gas in the first quarter of 2015 due to a decline in global oil prices.

Read more: EU will promote fulfillment of trilateral agreements on gas

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