Ukraine starts repaying its gas debt to Russia

Gas valves, Ukraine
Source: DollarPhotoClub

On the 4th Novemeber (Tuesday) Ukrainian state energy firm Naftogaz paid Gazprom the first tranche of its debt for previous supplies delivered to the country.

The payment of $1.45 billion is half of $3.1 billion Naftogaz sees as outstanding. Gazprom, however, says that Naftogaz owes a total of $5.3 billion. The Stockholm arbitration court is currently deciding whether the Ukrainians will have to pay the $2.2 difference.

Ongoing disputes notwithstanding, the deal agreed last week between Moscow, Kyiv, and EU means that Gazprom will restart gas supplies to Ukraine over winter in return for payments funded in part by the Western supporters of Ukrainian government. According to the agreement, on top of the first tranche of debt, Naftogas will also pay $760 million up front for November supplies.

“The Brussels agreements are temporary solutions and do not affect the positions of the parties in [the Stockholm] court,” Naftogaz said in a statement.

Moscow also warned that if Ukraine opts for reverse flow supplies from Western Europe – a step that Gazprom sees as a breach of its contracts – if would cut of gas supplies through Ukraine.

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