UPDATE 1-Ukraine energy minister indicates Russia Q4 gas price will be less …


(Adds quote, details)

By Pavel Polityuk

KYIV, Sept 28 (Reuters) – Ukrainian Energy Minister
Volodymyr Demchyshyn indicated on Monday that the price Ukraine
was willing to pay Russia for gas supplies in the fourth quarter
was less than $228, a price lower than Russia had earlier
announced.

Ukraine has not bought gas from Russia since July because of
a long-running price dispute. Talks last week led to a tentative
agreement on supplies for the winter period, but the deal has
not yet been signed.

On Saturday, Russia’s energy minister said Ukraine would pay
around $230 per thousand cubic metres for gas from Russia in the
fourth quarter, including a discount.

However, when asked at a briefing if Ukraine would pay $230
or $228 per thousand cubic metres for supplies from Russia,
Demchyshyn pointed downwards, indicating the price would be
lower.

He declined to name the exact price, but said that Ukrainian
state energy firm Naftogaz planned to buy 2.2 billion cubic
metres of Russian gas for $500 million.

This amounts to around $227 per thousand cubic metres,
according to Reuters calculations.

Demchyshyn also said that the price could fall by a further
five percent in the first quarter of 2016 due to a slump in
global oil prices.

According to the 2009 gas deal with Gazprom, the gas price
for Ukraine is defined every quarter and depends on the price
for oil and oil products.

“We expect that (the gas price) in the first quarter (of
2016) will be even lower. We expect that the price from European
partners (for Ukraine) will go down,” Demchyshyn said.

He said that Ukraine would continue to purchase gas from the
European Union even after it signed a new deal with Russia.

Tensions between Russia, Europe’s biggest gas supplier, and
Ukraine, the main transit route to the EU, have been high since
Moscow’s seizure of Crimea in March 2014.

Ukraine halted gas imports from Russia in July after the two
sides failed to agree a gas price for the third quarter. Since
then Kyiv has imported gas via reverse flows from the EU, mostly
from Slovakia.

According to transport monopoly Ukrtransgaz, Ukraine had
accumulated 15.5 bcm of gas in underground storage as of Sept.
28.

Ukraine has said it needs to have stored 19 bcm of gas to
safeguard its own supply in winter as well as to ensure there
are no disruptions to the transit of Russian gas across the
country to Europe.

The EU receives about 40 percent of its Russian gas imports
via Ukraine.

(Reporting by Pavel Polityuk, Alessandra Prentice, editing by
David Evans and Adrian Croft)