News.Kyiv.Me.

By Andrey Ostroukh and Alexander Kolyandr 

MOSCOW–Ukraine is ready to repay $1.9 billion in outstanding debt to Russia for natural gas deliveries if Moscow and Kyiv agree on an interim gas price of $326 per 1,000 cubic meters, the head of Ukrainian gas monopoly Naftogaz said Friday.

An official with Russia’s Energy Ministry, who asked not to be named, said the ministry was unaware of Ukraine’s willingness to cover the debt or its readiness to agree to a price of $326 per 1,000 cubic meters.

Kyiv, which must repay the debt by Monday morning to avoid a prepayment system for gas supplies from Russia, is seeking a new gas contract and had previously said it wants the price to be set at $268.50 per 1,000 cubic meters. That was the amount it paid for its first-quarter gas deliveries from Russia as had been agreed in late 2013 between Russian President Vladimir Putin and his ousted Ukrainian counterpart Viktor Yanukovych.

Andriy Kobolev, the head of Naftogaz, said a gas price of $326 per 1,000 cubic meters, backed by the European Union, wasn’t the market price but Kyiv is prepared to pay this amount for gas supplies for a year and a half before reaching a final agreement with Russian gas monopoly Gazprom, Interfax reported.

In April Gazprom raised the price it charges Ukraine for gas by 80% to $485.50 per 1,000 cubic meters. Russia has offered to lower that price by $100 to $385 per 1,000 cubic meters, which Kyiv has called a political move aimed at further destabilizing Ukraine’s economy. Kyiv officials have demanded a further discount, given that the latest offer remains 44% higher than the subsidized price Ukraine was paying before Gazprom raised the country’s rates in April.

Mr. Kobolev said that Ukraine stands ready to continue talks with Gazprom to settle the gas dispute, something that the two sides have failed to achieve in the past few weeks.

The official at the Russian energy ministry said that no talks between Russia and Ukraine were scheduled before Monday.

The official said any further talks are possible only if Naftogaz wires $1.951 billion to Gazprom to cover the debt for past gas deliveries by 1000 Moscow time (0600 GMT) on Monday, June 16.

Gazprom has repeatedly threatened to switch off gas supplies to crisis-hit Ukraine but has postponed the deadline for debt repayment several times. If Ukraine decides to meet Moscow’s requirements, it will have to pay for the gas on Friday for the money to arrive at Gazprom early on Monday.

Gazprom’s chief executive Alexei Miller said Thursday the debt that Gazprom claims includes $1.45 billion for gas deliveries in November and December. He said Ukraine also should show its commitment to redeem debts for April and May supplies with an extra payment of $500 million.

Write to Andrey Ostroukh at andrey.ostroukh@wsj.com and Alexander Kolyandr at Alexander.Kolyandr@wsj.com

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(END) Dow Jones Newswires

June 13, 2014 08:53 ET (12:53 GMT)

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