The trend to breakup of gas relations between Russia and Ukraine will continue.

29 october 2013 | Finam FM

Alexey Miller, Head of Gazprom, said that because of a breach in contract, Russia is looking at continuing to supply gas to Ukraine on a prepaid basis. Ukraine had to pay for the gas it received in August no later than on October 1, but the debt has not been paid.

Alexander Kurdin
Alexander Kurdin
Department for Fuel and Energy Sector

Alexander Kurdin, Head of the Directorate for Strategic Studies in Energy at the Analytical Center for the Government of the Russian Federation, during his interview with Finam FM radio, said: “If such a situation occurred in relations with a European consumer, it could lead to scandals, but this situation with Ukraine is already an integral part of the energy policies of both countries.”

The expert suggested that Ukraine could choose between two paths: “First, this country has incentives to extract its own gas, but unfortunately, the extraction of shale gas has not been successful yet. Second, Ukraine is hoping that successful development of relations with Europe will enable it to get supplies of gas from the European markets”.

Mr. Kurdin said that “both sides are trying to shake each other, in order to achieve favorable terms for them”. According to him, the introduction of pre-payment could add another twist to the already complicated relations between Russia and Ukraine. “The trend to breakup of gas relations will continue,” he concluded.