May 14, 2014 - 13:43 AMT
Ukraine can use EU aid to pay off Russian gas debt: official

Ukraine will be able to use the EU’s financial assistance to pay off its debt for Russian gas, a spokesman for the European Commission on economic and monetary affairs said Tuesday, May 13, according to RIA Novosti.

"This is support for the Ukrainian budget with a view [to enabling Ukraine] to make the necessary payments in the energy sector," Simon O'Connor said.

Ukraine and the EU were expected to sign an agreement on the provision of 1 billion euro in financial assistance to Kiev in Brussels on Tuesday, during a visit of the Ukrainian government officials.

A Ukrainian government delegation, led by Energy Minister Yuriy Prodan, was also scheduled to discuss gas issues with EU energy commissioner Gunther Oettinger in Brussels. The sides were also expected to discuss the issues related to natural gas supplies from Russia to Ukraine and its transit to EU countries.

Earlier Tuesday, Russian gas giant Gazprom sent an official notification to Ukrainian national oil and gas company Naftogaz about switching to advanced payment for gas supplies. If Ukraine fails to pay for June deliveries by June 2, Gazprom will cut off gas supplies from June 3.

Ukraine has not paid for Russian gas for two months. According to Gazprom, Ukraine’s accumulated debt for previous deliveries totals $3.5 billion. On April 1, the price of Russian gas for Ukraine rose to $485 per thousand cubic meters from $268.50, as Russia withdrew two major discounts. Ukraine refuses to recognize the new gas price, which, Russia says, is fully in line with the contract that the two states signed in 2009.