Disagreement between Gazprom and Naftogaz could result in disruption of gas deliveries to South-East Europe

The decision of Gazprom about the stopping of advance payments to Naftogaz for gas transit at least to 2015 could result in some disruption to gas deliveries to South-East Asia due to low gas level in Ukrainian storages, Fitch reports.

The agency notes, the advance payments of Gazprom are very important for Naftogaz which needs the income from gas transit and the support of Ukrainian government to cover the losses from gas sales at the internal market due to low tariffs set by the government. Since the beginning of 2012 Gazprom has transferred $3.5 billion of advance payments to Naftogaz. The company used the money to finance the purchase of Russian gas and replenish the storages. However, Gazprom has recently claimed, the last payment at the amount of $1 billion would cover the period until the beginning of 2015.