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German firm gives nation gas lifeline

AP

German utility company RWE said Tuesday it has started sending natural gas to Ukraine — a move that could support the country if Russia acts on its threat to cut off supplies because of a massive debt for past deliveries.

The reverse-flow deliveries from Germany via Poland are largely symbolic for the moment, but could be ramped up to provide about a fifth of the country’s gas needs.

Last week, Russian President Vladimir Putin said Ukraine owes Russia $35.4 billion for gas — about 20 times more than Moscow had previously asked for. He said Russia may ask for Ukraine to start paying for gas in advance or face a shut-off.

About a third of the gas that RWE AG will supply to Ukraine originally comes from Russia, said company spokesman Helmut Weintoegl. The rest comes from Norway, Britain, the Netherlands and Germany. RWE Supply & Trading is the first Western European company to begin gas deliveries to Ukraine this year, the firm said.

“Further significant volumes could be delivered to Ukraine if various transport restrictions at the Slovakian-Ukrainian border are politically and technically resolved within the next weeks or months,” the company said.

RWE declined to disclose the exact price it is charging Ukraine, but said the supply wasn’t subsidized in any way. “The price is a normal market price,” Weintoegl said. “It’s currently more attractive for Ukraine than what it pays in its long-term contracts,” he added.

Under an deal signed with Ukraine’s state-owned Naftogaz in 2012, RWE could supply up to 10 billion cu. meters of natural gas per year, it said. This is about one-fifth of Ukraine’s gas needs, according to U.S. figures for 2012.