The interim deal signed between Ukraine, Russia and the European Commission last week allows Naftogaz of Ukraine to order gas from Gazprom flexibly and without take-or-pay provisions. The prerequisite for resuming supply of Russian gas to Ukraine was the transfer of $1.45 billion by Naftogaz to Gazprom, which was executed yesterday.

"The terms of the trilateral agreement allow us to buy Russian gas for balancing the system in times of peak demand. Russian gas will be ordered if Ukrainian consumers require more gas than can be provided by other sources such as current volumes in storage, our own production and imports from the EU. Only in case of excess demand will we make use of our right to buy gas from Gazprom. The main suppliers of imported gas to Ukraine this winter are European companies,” said Naftogaz CEO Andrei Kobolyev.

"The total volume of gas that we will import this winter depends on the behaviour of Ukrainian consumers. The more efficiently we use energy the less we will have to import. Two-thirds of gas consumption in winter is driven by households. If the central heating in our homes is too high and we open windows to lower the temperature then this is the best way to promote purchases of Russian gas,” added Mr Kobolyev.

Naftogaz will pay Gazprom $3.1 billion related to 11.5 billion cubic meters of gas supplied in November to December 2013 and April to June 2014, priced at $268.5 per thousand cubic meters, following the trilateral agreement signed in Brussels last week. The Arbitration Institute of the Stockholm Chamber of Commerce will make a decision on debt settlement between the parties for the period since 2010. The Brussels protocol does not prejudice these Arbitration Institute proceedings.

About Gazprom

Gazprom is a global energy company. Its major business lines are geological exploration, production, transportation, storage, processing and sales of gas, gas condensate and oil, sales of gas as a vehicle fuel as well as generation and marketing of heat and electric power.

Gazprom views its mission in reliable, efficient and balanced supply of natural gas, other energy resources and their derivatives to consumers.

Gazprom holds the world’s largest natural gas reserves. The Company’s share in the global and Russian gas reserves makes up 18 and 72 per cent respectively. Gazprom accounts for 14 and 74 per cent of the global and Russian gas output accordingly. At present, the Company actively implements large-scale projects aimed at exploiting gas resources of the Yamal Peninsula, Arctic Shelf, Eastern Siberia and the Far East, as well as hydrocarbons exploration and production projects abroad.

Gazprom is a reliable supplier of gas to Russian and foreign consumers. The Company owns the world’s largest gas transmission network – the Unified Gas Supply System of Russia with the total length of over 168 thousand kilometers. Gazprom sells more than half of overall produced gas to Russian consumers and exports gas to more than 30 countries within and beyond the former Soviet Union.

About Naftogaz

Naftogaz is the national oil and gas company of Ukraine, which was established in 1998. Headquartered in Kyiv, the company covers a full range of activities in the oil and gas business including: production and refinery; transportation and storage; wholesale trade and distribution as well as technical support. More information can be found at naftogaz-europe.com.

About Ukrtransgaz

Ukrtransgaz is the leading company engaged in transmission and storage of natural gas in Ukraine. The company is 100% owned by Naftogaz of Ukraine. Ukraine’s gas transmission system transported 132 bcm in 2013, including 86 bcm for the EU and Moldova. Ukrtransgaz owns Europe's largest underground gas storage network, with total capacity of 31 bcm.