Ukraine's gas debt is 'huge,' Gazprom says

March 3, 2014 at 7:25 AM

MOSCOW, March 3 (UPI) -- The gas debt incurred by Ukrainian energy company Naftogaz is "huge," a spokesman for Russian energy company Gazprom said.

Gazprom said a natural gas discount secured by the Ukrainian government in December may be canceled because of the $1.55 billion debt incurred by Naftogaz.

"What is owed is huge, not just for last year, but also debts for current deliveries," Gazprom spokesman Sergei Kupriyanov said in a Saturday interview with state news agency RIA Novosti.

Gazprom in 2009 cut gas supplies to Ukraine because of contractual disputes. A Ukrainian deal to settle the row put the price for natural gas at around $400 per thousand cubic meters, the standard purchase volume.

That was among the highest for Europe and the December deal for $268.5 per thousand cubic meters was meant to provide relief for a Ukrainian economy struggling with mounting debt issues.

European consumers get about a quarter of their gas needs met by Russia, though the majority of that gas is sent through a Soviet-era transit network in Ukraine.

Ousted Ukrainian President Viktor Yanukovych in November suspended efforts to sign free trade and association agreements with the European Union. That decision sparked a major uprising that led to him fleeing the country last month.

The new government says the economic situation in Ukraine is dire.

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